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Just about every economic measure is trending down in China, and not surprisingly, deflation fears are mounting. The China Beige Book (CBB) fourth-quarter preview, released Dec. 27, reported that sales volumes, output, domestic and export orders, investment, and hiring all fell on a year-over-year and quarter-over-quarter basis. A much-weaker 2019 appears to be in the offing for China, but it’s not solely due to trade tensions with the United States. The domestic economy was already on weak footing and the CBB argues that government support is unlikely. The CBB is a research service that speaks to thousands of companies and bankers on the ground in China every quarter. It contends that deflation is the bigger threat compared to inflation.

“Because of China’s structural problems, deflation has very clearly emerged as the bigger threat in a slowing economy than inflation. Consumer demand has weakened, and you see that reflected in retail and services prices,” said Shehzad Qazi, CBB managing director, in an interview. While lower prices look good for consumers, policy-makers don’t like deflation for a number of reasons. With prices falling, companies produce less, often lay off workers, and reduce investment, leading to a vicious circle of sorts. While the trade war hurts export-sensitive regions, local orders have now weakened for two straight quarters. Hiring fell for the first time since early 2016. Worse still, the fall was concentrated in services and retail, two sectors being counted upon to pick up the slack left by manufacturing’s woes.

Also, debt—of which China has plenty—becomes more problematic under deflation, as its value adjusted for inflation rises. And it’s an issue for central bankers, who typically target 2 percent inflation for price stability. Rate cuts to spur the economy and inflation are less effective, since the real interest rates are higher when accounting for deflation. “China is an aging, leveraged country, with excess industrial capacity. Appearances by inflation should be cheered,” according to the CBB Q4 preview. “They are also rare.”

No effort needed.

• Juncker: The EU Isn’t Trying To Keep Britain In The Union (R.)

The European Union is not trying to keep Britain in and wants to start discussing future ties the moment the U.K. parliament approves Brexit, partly to focus on its own unity ahead of May elections, the head of the bloc’s executive said. “It is being insinuated that our aim is to keep the United Kingdom in the EU by all possible means. That is not our intention. All we want is clarity about our future relations. And we respect the result of the referendum.” Jean-Claude Juncker, the head of the European Commission, told German newspaper Welt am Sonntag in an interview. Juncker said the EU was ready to start negotiating a new deal with Britain right after the British parliament approves the divorce deal. A vote is now due in the week starting Jan. 14.

He also said Britain should get its act together. “And then tell us what it is you want,” he said. “I am working on the assumption that it will leave, because that is what the people of the United Kingdom have decided,” he added, refusing to be drawn into whether Britain would hold a second Brexit vote. “That is for the British to decide.” [..] He said he felt EU citizens were increasingly growing apart, another problem to tackle ahead of Europe-wide parliamentary elections in May. “We have to ensure that these rifts do not become too deep,” Juncker said. “We must not imply that the populists are right … they are just loud and do not have any specific proposals to offer on solving the challenges of our time.”

They want more delays.

• UK Trade Minister Says ’50-50′ Chance Brexit May Be Stopped (R.)

Britain’s trade minister Liam Fox said there is a “50-50” chance that Brexit may be stopped if parliament rejects the government’s divorce deal with the European Union next month. “If we were not to vote for that, I’m not sure I would give it (Brexit) much more than 50-50,” Fox, a leading supporter of leaving the EU, told the Sunday Times newspaper. With three months left until the United Kingdom is due to leave the EU on March 29, May’s Brexit deal is floundering, opening up a range of possibilities from a Brexit without a trade deal to calling Brexit off. Earlier this month, May pulled a planned vote on her deal after admitting parliament would reject it. Lawmakers are set to vote on the deal in the week starting Jan. 14.

But a delay of a few months?! What good will that do?

• Cross-Party Move Aims To Delay Hard Brexit (G.)

Senior Tory and Labour MPs are planning to force the government to delay Brexit by several months to avoid a no-deal outcome if Theresa May fails to get her deal through parliament in January, the Observer has been told. Cross-party talks have been under way for several weeks to ensure the 29 March date is put back – probably until July at the latest – if the government does not push for a delay itself. It is also understood that cabinet ministers have discussed the option of a delay with senior backbench MPs in both the main parties and that Downing Street is considering scenarios in which a delay might have to be requested from Brussels.

One senior Tory backbencher said: “I have had these discussions with ministers. They will not say so in public but of course the option of a delay has to be looked at in detail now. If we are determined to avoid a no deal, and the prime minister’s deal fails, we will have to ask to stop the clock, and that will give time for us to decide to go whatever way we decide thereafter.” The Conservative MP and former attorney general Dominic Grieve said he believed that even if May got her deal through, there would probably be insufficient time to push all the necessary legislation through parliament to allow Brexit to happen smoothly and that a delay might well be necessary. But if her deal were voted down, the need to take up the option of a delay would become a “certainty”.

He said: “I think that if she does not get her deal passed, a delay would be inevitable to give more time to avoid a no deal, and also there is the possibility that there would be a referendum, so this would allow for that.” Labour’s Brexit spokesman Keir Starmer said that parliament would need to discuss all options, including a possible delay, if and when May failed to get her blueprint through the Commons. “If the prime minister’s deal is voted down in early January, then we will be just nine weeks away from the date we are due to leave the EU,” Starmer said. “If the deal is rejected, parliament will need to have a very serious debate about how to protect the economy from a no-deal scenario and at this stage nothing should be ruled out.”

Brexit options. Click to enlarge

“..if you think about the poems that English schoolkids will know, they’re all about defeats or retreats or disasters…”

• Brexit Is Full Of Hysterical Self-Pity – Fintan O’Toole (G.)

In your book, you criticise the way parallels have been made between Brexit and the 100 years war. What is the main problem? A single word: vassalage. What on earth is this word doing in political discourse in the 21st century? I was struck by its re-emergence. It comes originally from Jacob Rees-Mogg and Boris Johnson, this mad idea that somehow the 100 years war shows the English capacity to throw off feudal vassalage. It’s a ludicrous misunderstanding of history. The war was more like Charles Taylor in Sierre Leone – a hideous crime against humanity. To go back to that as the only thing you have to express what English freedom might mean in the 21st century shows how demented it is.

You also write about the long English tradition of clinging romantically to heroic defeat. What do you ascribe this to? George Orwell wrote about this in the early 1940s. He said that it was extraordinary that if you think about the poems that English schoolkids will know, they’re all about defeats or retreats or disasters. It’s Scott of the Antarctic, it’s the Charge of the Light Brigade, it’s Gordon of Khartoum. That tradition of heroic failure was great when you were ruling the world as it was a way of saying we’re not really a nasty imperial power. But in a post-imperial age you get a farcical version. Because originally the thing that characterised heroic failure in the English imagination was not self-pity, but Brexit is full of hysterical self-pity.

You describe a false caricature of Germany, put about by Brexiters, of an expansionist nation. You also say that the EU, and especially Germany, had a need to severely punish debtor countries. Is Germany the glue that holds the EU together or a controlling villain? There’s no doubt that Germany is the major power in Europe, and that’s one of the things going on with Brexit. It’s this idea that this country we defeated twice in the 20th century is now seen as the dominant power. That leads to fantasies that Britain really lost the war and we’re being taken over insidiously by the Germans. The real problem with the Germans isn’t that they’re trying to take over Europe. It’s that they’ve promulgated a very heavy austerity that is deeply ingrained in the German mentality. The irony is, it’s exactly the policy that the Tory Brexiters themselves were pursuing.

Not quite UBI.

• Italian Parliament Passes Budget After EU Standoff (BBC)

Italy’s parliament has approved a revised budget for 2019, amid opposition complaints that it was dictated by the EU. The country’s populist government had originally vowed to push through costly campaign promises including a universal basic income. But in October, the European Commission raised concerns about the impact of such spending on Italy’s debt levels. Rome was told to revise its budget, or face fines and disciplinary action. Under a deal struck with the Commission last week, Italy lowered its planned budget deficit from 2.4% of GDP to 2.04% – less of a reduction than European officials had hoped for. The value of its concessions is understood to be a little more than €10bn. The deadline for passing the budget was 31 December, after which the government would have been forced to continue with the 2018 budget on a monthly basis.

[..] Italy’s coalition government, made up of the anti-establishment Five Star Movement and right-wing League, has pledged the following:
• A new income support scheme known as the “citizens’ wage” will pay €780 a month to 1.7 million of Italy’s poorest families. The measure is forecast to cost €7.1bn.
• The retirement age will be cut from the current 67 to 62, for workers who have paid into the pension system for 38 years.
• More than a million self-employed workers earning under €65,000 a year will see their taxes cut to 15%.

Watch for New Year’s Eve.

• Yellow Vests Target French Media Companies And Set Cars Alight (Ind.)

Protesters in France have marched on the headquarters of various French media organisations, with groups taking to the streets in small groups in Paris and across the country. Now in its seventh week, the gilet jaunes (yellow vest) protests have shrunk somewhat but hundreds of demonstrators, some chanting “fake news” and “journalists – collaborationists”, and others hurling stones, descended on the offices of TV network BFM and the state-run France Televisions. Police in riot gear intervened, leading to skirmishes, with officers eventually using tear gas to disperse those on the streets and making a number of arrests. Despite a lower turnout than at previous protests demonstrators still caused havoc, with some setting fire to a number of cars in central Paris leaving streets choked by fumes.

Damn foreigners!

• Cyber Attack Disrupts Printing Of Major US Newspapers (R.)

A cyber-attack has caused printing and delivery disruptions to major US newspapers, including the Los Angeles Times, the Chicago Tribune and the Baltimore Sun. The attack on Saturday appeared to originate outside the United States, the Los Angeles Times reported. It led to distribution delays in the Saturday edition of the Times, the Tribune, the Sun and other newspapers that share a production platform in Los Angeles. Tribune Publishing, which owns the Chicago Tribune and the Sun, as well as the New York Daily News and Orlando Sentinel, said it first detected the malware on Friday.

The west coast editions of the Wall Street Journal and New York Times were also hit, as they are printed on the shared production platform, the Los Angeles Times said. A Tribune Publishing spokeswoman, Marisa Kollias, said the virus affected back-office systems used to publish and produce “newspapers across our properties”. “There is no evidence that customer credit card information or personally identifiable information has been compromised,” Kollias said. Most San Diego Union-Tribune subscribers were without a newspaper on Saturday as the virus infected the company’s business systems and hobbled its ability to publish, the paper’s editor and publisher, Jeff Light, wrote on its website.

“..when Mattis and Dunford sang the praises of the “rules-based, international democratic order” that has “kept the peace for 70 years,” Trump simply shook his head in disbelief.”

• Trump Scores, Breaks Generals’ 50-Year War Record (Porter)

The relationship between Trump and his national security team has been tense since the beginning of his administration. By mid-summer 2017, Defense Secretary James Mattis and Chairman of the Joint Chiefs General Joseph Dunford had become so alarmed at Trump’s negative responses to their briefings justifying global U.S. military deployments that they decided to do a formal briefing in “the tank,” used by the Joint Chiefs for meetings at the Pentagon. But when Mattis and Dunford sang the praises of the “rules-based, international democratic order” that has “kept the peace for 70 years,” Trump simply shook his head in disbelief.

By the end of that year, however, Mattis, Dunford, and Secretary of State Mike Pompeo believed they’d succeeded in getting Trump to use U.S. troops not only to defeat Islamic State but to “stabilize” the entire northeast sector of Syria and balance Russian and Iranian-sponsored forces. Yet they ignored warning signs of Trump’s continuing displeasure with their vision of a more or less permanent American military presence in Syria. In a March rally in Ohio ostensibly about health care reform, Trump suddenly blurted out, “We’re coming out of Syria, like, very soon. Let the other people take care of it now. Very soon—very soon we’re coming out.”

Then in early April 2018, Trump’s impatience with his advisors on Syria boiled over into a major confrontation at a National Security Council meeting, where he ordered them unequivocally to accept a fundamentally different Syria deployment policy. Trump opened the meeting with his public stance that the United States must end its intervention in Syria and the Middle East more broadly. He argued repeatedly that the U.S. had gotten “nothing” for its efforts, according to an account published by the Associated Press based on interviews with administration officials who had been briefed on the meeting. When Dunford asked him to state exactly what he wanted, Trump answered that he favored an immediate withdrawal of U.S. forces and an end to the “stabilization” program in Syria.

Mattis responded that an immediate withdrawal from Syria was impossible to carry out responsibly, would risk the return of Islamic State, and would play into the hands of Russia, Iran, and Turkey, whose interests ran counter to those of the United States. Trump reportedly then relented and said they have could five or six months to destroy the Islamic State. But he also made it clear that he did not want them to come back to him in October and say that they had been unable to defeat ISIS and had to remain in Syria. When his advisors reiterated that they didn’t think America could withdraw responsibly, Trump told them to “just get it done.”

New Knowledge. Defenders of freedom. Geez…

• Firm That Warned US Of Russian Bots Ran An Army Of Fake Russian Bots (RT)

The co-founders of cybersecurity firm New Knowledge warned Americans in November to “remain vigilant” in the face of “Russian efforts” to meddle in US elections. This month, they have been exposed for doing just that themselves. Ryan Fox and Jonathan Morgan, who run the New Knowledge cybersecurity company which claims to “monitor disinformation” online, penned a foreboding op-ed in the New York Times on November 6, about “the Russians” and their nefarious efforts to influence American elections. At the time, it struck me that Fox and Morgan’s reasoning seemed a little far-fetched. For example, one of the pieces of evidence presented to prove that Russia had targeted American elections was that lots of people had posted links to RT’s content online.

Hardly a smoking gun worthy of a Times oped. Morgan and Fox, intrepid cyber sleuths that they are, claimed in the article they had detected more “overall activity” from ongoing Russian influence campaigns than social media companies like Facebook and Twitter had yet revealed — or that other researchers had been able to identify. The New Knowledge guys even authored a Senate Intelligence Committee report on Russia’s alleged efforts to mess with American democracy. They called it a “propaganda war against American citizens.” Impressive stuff. They must be really good at their job, right? This week, however, we learned that New Knowledge was running its own disinformation campaign (or “propaganda war against Americans,” you could say), complete with fake Russian bots designed to discredit Republican candidate Roy Moore as a Russia-preferred candidate when he was running for the US senate in Alabama in 2017.

The scheme was exposed by the New York Times — the paper that just over a month earlier published that aforementioned oped, in which Fox and Morgan pontificated about Russian interference online. New Knowledge created a mini-army of fake Russian bots and fake Facebook groups. The accounts, which had Russian names, were made to follow Moore. An internal company memo boasted that New Knowledge had “orchestrated an elaborate ‘false flag’ operation that planted the idea that the Moore campaign was amplified on social media by a Russian botnet.”

How popular do you think it would be if we pay people to not kill off orangutans? Lions, hippos?

• EU’s Palm Oil Policy Triggers Condemnation From Producing Countries (CNBC)

The European Union is phasing out the use of palm oil in transport fuel, triggering criticism of trade protectionism and threats of retaliation from major producersIndonesia and Malaysia. The European move comes after years of activist campaigns about the vegetable oil associated with rampant deforestation and labor abuses, highlighting how consumer concerns about sustainability are increasingly influencing businesses. According to Eyes on the Forest, a coalition of environmental non-governmental organizations co-founded by the World Wildlife Fund, the large Indonesian island of Sumatra lost 56 percent of its 25 million hectares (250,000 square kilometers, or bigger than the size of the U.K.) of natural forests over 31 years.

The palm oil industry, with its national epicenter on that island, is thought to be one of the biggest drivers of that loss, the coalition said. France and Norway have become the first few countries to start curbing use of palm oil in the last month, driving fears in major Southeast Asian producing countries, where the cash crop has powered economic growth. Indonesia and Malaysia together produce over 80 percent of the world’s palm oil. More broadly, the EU agreed in June to phase out the use of palm oil in transport fuel from 2030 as part of a broader plan to increase the share of renewables in the bloc’s energy production. The EU is one of the world’s top consumers of palm oil, which is used in a wide range of products from baked goods to detergents.

All of a sudden the UK creates a frenzy over refugees in the Channel.

• People-Smugglers Use Social Media To Lure Migrants To Their Deaths – UN (Ind.)

Tech companies are failing to crack down on people-smugglers using their platforms to lure migrants “to their deaths” with promise of safe passage to Europe, the UN has warned. Companies such as Facebook and WhatsApp are “enabling criminal activity” by traffickers who entrap victims who are unaware of the dangers they face, according to the UN’s migration agency. The warning comes amid a surge in migrants attempting to reach the UK by crossing the Channel in small boats, with almost 100 people intercepted by both British and French authorities while attempting to reach the UK from France since Christmas Day. [..]

Leonard Doyle, spokesperson for the International Organisation for Migration (IOM), said migrants were being “lured to Calais” over the internet as smugglers operate via social networks “without any real oversight” from the companies controlling them. He said that while tech firms had taken measures to curb other exploitative activities such as child pornography, efforts to prevent people-smuggling has been “microscopic” compared with the damage it causes. [..] Charities on the ground in northern France meanwhile cautioned that irregular migration was not the result of social media but of the persecution faced by migrants in their home countries. But they said failure by European governments to inform refugees of their right to seek asylum and how to do so had enabled criminal gangs to “fill the void”, often through online social networks.

Mr Doyle told The Independent: “People like to point fingers over the migration crisis, but a big part of it must be that the guy or the girl in the village with nothing but a cracked smartphone can actually meet a smuggler in a heartbeat. “This person will often have no prior knowledge, no sense that this is a trap, no sense that this is going to end up in their prostitution, their slavery, their murder, their drowning. “But the tech companies that have done so much to bring technology to its current place are not investing in civic communication to help counter-balance the nonsense people get from social media.

Debt Rattle November 10 2018

Nov 102018

November 10, 2018 Posted by Raúl Ilargi Meijer at 10:15 am Finance Tagged with: Big Tech, blue wave, Brexit, Corbyn, Haley, Italy, Khashoggi, palm oil, Trump, Yelp, Yemen 4 Responses »

Peter Stackpole SophiaLoren in a Manhattan Coffee, NYC 1958

• Burying the Other Russia Story (WSJ Op-Ed)

• No Blue Wave In 2018, But A Tsunami Of Hate (ZH)

• Post Mortem (Kunstler)

• ‘Democrats Won The House But Trump Won The Election’ – And 2020 Is Next (G.)

• Federal Court Asks How Sessions Ouster Impacts Lawsuit Challenging Mueller (R.)

• Tech’s Big Five Lost A Combined $75 Billion In Market Value On Friday (CNBC)

• Yelp Craters As Much As 32% As Advertisers Abandon The Site (CNBC)

• Jeremy Corbyn Says Brexit ‘Can’t Be Stopped’ (Ind.)

• New Blow To Theresa May As EU Leaders Demand Scrutiny Of Brexit Deal (G.)

• US Crude Oil Posts Longest Losing Streak In Over 34 Years (CNBC)

• There Will Be An Oil Shortage In The 2020s, Goldman Sachs Says (CNBC)

• EU Version Of Budget Would Be Economic ‘Suicide’ For Italy – Tria (CNBC)

• US Won’t Refuel Saudi Coalition Planes Bombing Yemen Anymore (RT)

• UK Supermarket Anti-Palm Oil Ad Banned For Being Too Political (R.)

As the post-midterms wars of words escalate, the Wall Street Journal’s editors try to provide some balance.

• Burying the Other Russia Story (WSJ Op-Ed)

Arguably the most important power at stake in Tuesday’s election was Congressional oversight, and the most important change may be Adam Schiff at the House Intelligence Committee. The Democrat says his top priority is re-opening the Trump-Russia collusion probe, but more important may be his intention to stop investigating how the FBI and Justice Department abused their power in 2016. So let’s walk through what we’ve learned to date. Credit for knowing anything at all goes to Intel Chairman Devin Nunes and more recently a joint investigation by Reps. Bob Goodlatte (Judiciary) and Trey Gowdy (Oversight).

Over 18 months of reviewing tens of thousands of documents and interviewing every relevant witness, no Senate or House Committee has unearthed evidence that the Trump campaign colluded with Russia to win the presidential election. If Special Counsel Robert Mueller has found more, he hasn’t made it public. But House investigators have uncovered details of a Democratic scheme to prod the FBI to investigate the Trump campaign. We now know that the Hillary Clinton campaign and the Democratic National Committee hired Fusion GPS, which hired an intelligence-gun-for-hire, Christopher Steele, to write a “dossier” on Donald Trump’s supposed links to Russia.

Mr. Steele fed that document to the FBI, even as he secretly alerted the media to the FBI probe that Team Clinton had helped to initiate. Fusion, the oppo-research firm, was also supplying its dossier info to senior Justice Department official Bruce Ohr, whose wife, Nellie, worked for Fusion. House investigators have also documented the FBI’s lack of judgment in using the dossier to obtain a Foreign Intelligence Surveillance Act (FISA) warrant against former Trump aide Carter Page. The four FISA warrants against Mr. Page show that the FBI relied almost exclusively on the unproven Clinton-financed accusations, as well as a news story that was also ginned up by Mr. Steele.

[..] All of which puts an additional onus on Mr. Trump to declassify key FBI and Justice documents sought by Mr. Nunes and other House investigators before Mr. Schiff buries the truth. A few weeks ago Mr. Trump decided to release important documents, only to renege under pressure from Deputy AG Rod Rosenstein and members of the intelligence community. Mr. Sessions resigned this week and perhaps Mr. Rosenstein will as well. Meantime, Mr. Trump should revisit his decision and help Mr. Nunes and House Republicans finish the job in the lame duck session of revealing the truth about the misuse of U.S. intelligence and the FISA court in a presidential election.

What happened to Tucker Carlson’s wife is inexcusable.

• No Blue Wave In 2018, But A Tsunami Of Hate

In the early evening following the midterm elections, Fox News host Tucker Carlson’s wife was home alone when she suddenly became startled by a loud thumping at her door. The thumping came from a group of Antifa radicals, whose desire it was to strike terror into the hearts of Carlson’s family. Susan Carlson ran upstairs as the mob that CNN refers to as “protesters” screamed disgusting threats at the Carlson residence, spray-painted the driveway and continued to try to force entry through the front door, which they broke. The only thing seemingly missing from this display of intimidation and hatred were burning tiki torches.

While the radical left seems preoccupied with labeling everyone that disagrees with their political views as white supremacist Nazis, including Israel-loving Middle Eastern women such as myself, threatening displays like this seem awfully similar to the days of the KKK burning crosses on the lawns of blacks they wanted to leave town. That was the message these radicals wanted to send to Tucker Carlson, along with his wife and children, who thank God were not home at the time: leave town and shut up. As someone who has had my own personal address posted publicly by a leftist reporter, the thought of a mother of four hiding in her upstairs closet fearing for her life sends chills down my spine, as it should any decent human being.

How did we get here? Let’s take a trip down memory lane: “Let’s make sure we show up wherever we have to show up … If you see anybody from that Cabinet in a restaurant, in a department store, at a gasoline station, you get out and you create a crowd, and you push back on them, and you tell them they’re not welcome anymore, anywhere.” Those were the exact words of Congresswoman Maxine Waters at a rally in June 2018. Waters then doubled down on her calls for intimidation and harassment in an MSNBC interview, declaring that she has “no sympathy” for Trump supporters. “The people are going to turn on them. They’re going to protest. They’re going to absolutely harass them until they decide that they’re going to tell the president, ‘No, I can’t hang with you.’

[..] Former Obama Attorney General Eric Holder recently corrected Michelle Obama’s notion that “when they go low, we go high,” referring of course to anyone who didn’t support her husband’s political agenda. “When they go low, we kick them. That’s what this new Democrat party is all about.” Holder proclaimed to a crowd of cheering supporters. Or how about former Secretary of State Hillary Clinton’s statement, “You cannot be civil with a political party that wants to destroy what you stand for, what you care about. That’s why I believe if we are fortunate enough to win back the House and/or the Senate, that’s when civility can start again.”

As we’ve said many times: declassify the whole thing.

• Post Mortem (Kunstler)

Of course The New York Times is no longer a newspaper in the traditional sense, but an advocacy and propaganda arm of the Democratic Party. They’re pushing this desperate gambit because it’s clear that Mr. Trump is taking the gloves off now in this long-running battle. What’s at stake is whether the DOJ will prosecute the actual and obvious collusion that occurred during and after the 2016 election — namely, the misconduct of the highest DOJ and FBI officials in collusion with the Hillary Clinton campaign to cook up the bogus Russia-gate case, and the subsequent scramble to cover up their activities when Mrs. Clinton lost the election and they realized the evidence trail of this felonious activity would not be shoved down the memory hole by Clinton appointees.

The result has been two years with no evidence of Trump-Russia collusion and two years of DOJ / FBI stonewalling over the release of pertinent documents in the matter. There is already an established and certified evidence trail indicating that James Comey, Andrew McCabe, Peter Strzok, Bruce and Nellie Ohr, Lisa Page, and others (including former CIA Director John Brennan and former DNI James Clapper) acted illegally in politicizing their offices. Some of these figures have been subject to criminal referrals by the DOJ Inspector General, Mr. Horowitz. Some of them are liable to further criminal investigation Many of them have been singing to grand juries out of the news spotlight.

Whether Mr. Whitaker remains in his new role, or is replaced soon by a permanent AG confirmed by the Senate, the momentum has clearly shifted. The Democrats, and especially the forces still aligned with Hillary, are running scared all of a sudden. Thus, all the bluster coming from party hacks such as Rep. Jerrold Nadler (D-NY 10th Dist), and Senate Minority Leader Chuck Schumer (D-NY). Mr. Nadler takes the gavel of the House Judiciary Committee in January and is promising a three-ring circus of investigations when he does. If the House moves to a quixotic impeachment effort, they will find that to be a dangerous two-way street, since Mr. Trump’s legal team can also introduce testimony in his defense that will embarrass and incriminate the Democrats. Anyway, the Senate is extremely unlikely to convict Mr. Trump in a trial.

I understand the thinking, but really, Nikki Haley?!

• ‘Democrats Won The House But Trump Won The Election’ – And 2020 Is Next (G.)

Henry Olsen, a senior fellow at the Ethics and Public Policy Center thinktank, said Trump had both won and lost. “There’s a split verdict. The voters who made him came back and he maintained a 46% coalition. He lost the voters he lost two years ago in slightly bigger numbers. The Clinton coalition is strong and growing stronger, but it’s electorally inefficient. Trump has kept his minority coalition together and all he needs is a slight improvement to be assured of re-election.” Speaking at the American Enterprise Institute (AEI) thinktank on Thursday, Olsen noted the growing percentage of women in the Democratic party and suggested: “I think it’s very likely that Donald Trump will be facing a woman.”

“And if Donald Trump, who’s known to be ruthless to subordinates, wanted to change the odds in his favour, I think he should dump Mike Pence and select [former UN ambassador] Nikki Haley. “The biggest thing that the Democrats continually push, and the media continually push, is that he is a racist and a sexist, and that is one of the things that weighs very heavily on the Rino- [“Republican in name only”] educated person. So you say: ‘I’ve changed America and the person who’s going to continue this is going to be a competent executive who understands foreign policy and ran her state and is a woman of colour, Nikki Haley.’ It will flummox the left.”

How legal is Mueller’s appointment, and his investigation? If there is genuine doubt, the legal system should speak.

• Federal Court Asks How Sessions Ouster Impacts Lawsuit Challenging Mueller (R.)

A federal appeals court that is weighing a legal challenge to Special Counsel Robert Mueller’s authority said Friday it wanted to know whether the sudden ouster of Attorney General Jeff Sessions could impact or change the outcome of how it should rule. The court’s order directed each party in the case to file briefs by Nov. 19 outlining, “what, if any effect, the November 7, 2018 designation of an Acting Attorney General different from the official who appointed Special Counsel Mueller has on this case.” The order came one day after a three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments on whether Mueller was unlawfully appointed by Deputy Attorney General Rod Rosenstein in May 2017 and wielded too much power.

The challenge to Mueller’s authority was being brought by Andrew Miller, an associate of President Donald Trump’s long-time political adviser, Roger Stone. Several of Stone’s associates have been subpoenaed by a grand jury in recent months, as part of Mueller’s probe into whether Trump’s campaign colluded with Russia. Miller defied the subpoena in May, was later held in civil contempt, and filed a lawsuit alleging that Mueller’s appointment violated the U.S. Constitution and also that Rosenstein had no authority to hire him. Mueller was named special counsel by Rosenstein after Sessions recused himself from the probe. However, Rosenstein lost his role as Mueller’s supervisor on Wednesday after Trump forced Sessions to resign and replaced him with Matt Whitaker.

The losses continue to add up.

• Tech’s Big Five Lost A Combined $75 Billion In Market Value On Friday (CNBC)

It was a down day for big tech. Apple, Microsoft, Amazon, Alphabet and Facebook — the five most valuable U.S. tech companies — lost a combined $75 billion in market value on Friday. They led a 1.7 percent drop in the S&P 500 tech index and a similar slide in the tech-heavy Nasdaq. Amazon was the worst performer of the group, dropping 2.4 percent. Stocks fell across the board Friday as declines in oil prices and skepticism about a trade deal with China raised concerns that economic growth is headed for a slowdown. Thursday’s report from the Federal Reserve pointing to future rate hikes compounded worries and sent investors fleeing from tech companies, which are particularly susceptible to swings in the economy.

Tech stocks are coming off their worst month since 2008. The Nasdaq closed October down 9.2 percent, with Amazon and Alphabet leading the decline down 20 percent and 9.7 percent, respectively. Analysts were underwhelmed by recent tech earnings reports, including those from Amazon, Apple and Alphabet. Amazon gave lower-than-expected guidance going into the holiday season and Apple announced it would no longer disclose unit sales for iPhone, iPad and Mac devices.

Because Google, Facebook have monopolized ads.

• Yelp Craters As Much As 32% As Advertisers Abandon The Site (CNBC)

Yelp cratered as much as 32 percent Friday, a day after releasing third-quarter earnings that revealed advertisers are abandoning the site and denting revenue. Shares fell as low as $29.33, a new 52-week low, before paring some losses to close nearly 27 percent down at $31.92. The plunge makes for the stock’s worst day of trading since going public in 2012. Yelp added zero net new advertising customers during the quarter. Yelp earlier this year switched from long-term advertising contracts in local markets to more flexible, nonterm contracts. That change resulted in significant contract cancellations. Though the cancellations were expected, Yelp failed to compensate with lower-than-expected gross customer adds.

The company reported revenue of $241 million for the quarter, just shy of analyst projections of $245 million. “We do not believe that there was any one single factor behind the new sales shortfall relative to our expectations. Instead, a number of smaller, compounding issues arose, including slower-than-expected sales head count growth, a change in advertising promotions, a technical issue in flowing leads to our reps and a lower success rate in contacting business decision-makers by our outbound sales calls,” Chief Financial Officer Charles Baker said on the company’s earnings call.

Not sure Corbyn defying his own party is all that wise.

• Jeremy Corbyn Says Brexit ‘Can’t Be Stopped’ (Ind.)

Jeremy Corbyn has said that Brexit cannot be stopped in a blow to Labour MPs trying to inch the party towards backing a second referendum. The Labour leader’s comments mark a departure from the party’s official position, which leaves the prospect of fresh vote firmly on the table, including the option to remain in the European Union. Labour’s preferred option is to campaign for a general election but as the Brexit talks enter the chaotic final stages, the party is under pressure to soften its stance towards a new public vote. It comes as transport minister Jo Johnson dramatically resigned in protest at Theresa May’s Brexit plan, saying Britain is “barrelling towards an incoherent Brexit” and demanding a Final Say referendum.

Delegates at Labour’s conference in September, voted overwhelmingly in favour of a motion saying the party “must support all options remaining on the table, including campaigning for a public vote”. Shadow Brexit secretary Keir Starmer also received a standing ovation when he told the conference hall that remaining in the EU could be on the ballot paper in a future vote. But tensions remain over the issue, as influential figures such as Unite boss Len McCluskey and shadow chancellor John McDonnell are unenthusiastic about a re-run of the Brexit vote. Labour has agreed to vote down the prime minister’s Brexit deal if it fails to measure up to its tests on jobs and workers’ rights, which senior figures believe could allow Labour to pursue its preferred option – a general election.

In an interview with the German newspaper Der Spiegel, Mr Corbyn was asked if he would stop Brexit. He replied: “We can’t stop it. The referendum took place. Article 50 has been triggered. What we can do is recognise the reasons why people voted Leave.” Mr Corbyn said the Brexit vote was triggered by people who were “totally angered” by the way their communities had been left behind. He also indicated he felt sorry for the prime minister over the “impossible task” of reaching agreement with Brussels and uniting the Tory party, Mr Corbyn said: “I am a decent human being, I feel sorry for anyone in distress. But the best way for anyone to alleviate distress is to take yourself away from the source of it.”

Everyone wants a say, of course they do, both in Europe and in the UK.

• New Blow To Theresa May As EU Leaders Demand Scrutiny Of Brexit Deal (G.)

Theresa May has been dealt a blow in the Brexit negotiations by EU leaders ahead of a crunch week during which the Brexit secretary, Dominic Raab, had been expected to visit Brussels to unveil the negotiated agreement. Ambassadors for the EU27, including France and Germany, told the European commission that they would need to scrutinise any deal reached with the British before it was made public and a special summit called. The EU’s chief negotiator, Michel Barnier, has largely been given free rein until now. An “optimistic” timetable would have seen Raab arrive on Tuesday to present the legal text agreed between the commission and the British government.

But during a two-hour meeting with the the EU’s deputy chief negotiator, Sabine Weyand, the member states’ representatives insisted they would not be steamrollered into accepting the agreement secured between the two negotiating teams. They told the commission they would need the best part of a week to go through the text should there be an agreement in a sign of the growing nervousness over the prospect of giving away an all-UK customs union in the withdrawal agreement. The development makes it less likely that a November Brexit summit could be convened. EU officials have privately said that 25 November is the last possible date for a summit, and that it would need to be called early next week to allow preparations in EU capitals. May’s chief Brexit adviser, Olly Robbins, is expected to visit Brussels on Sunday given the lack of time to find agreement.

Hmmm. China shutting down? Note that this happens as the Iran sanctions are still waiting in the wings.

• US Crude Oil Posts Longest Losing Streak In Over 34 Years (CNBC)

U.S. crude prices fell Friday for a 10th consecutive session, sinking deeper into bear market territory and wiping out the benchmark’s gains for the year. The 10-day decline is the longest losing streak for U.S. crude since mid-1984, according to Refinitiv data. Crude futures fell for a fifth straight week as growing output from key producers and a deteriorating outlook for oil demand deepen a sell-off spurred by October’s broader market plunge. The drop marks a stunning reversal from last month, when oil prices hit nearly four-year highs as the market braced for potential shortages once U.S. sanctions on Iran snapped back into place.

“The market’s not tight. I think there are windows where you could perceive it to be tight, and I think the markets got caught into that,” Christian Malek, head of EMEA oil and gas research at J.P. Morgan, told CNBC on Friday. “The reality is that we’re still in a world where we’re overproducing and we’ve got surplus.” U.S. West Texas Intermediate crude settled 48 cents lower at $60.19 on Friday. The contract is now down nearly half a percent this year. It fell as low $59.26 on Friday, its weakest level in about nine months.

Ha! Help is on the way for Big Oil.

• There Will Be An Oil Shortage In The 2020s, Goldman Sachs Says (CNBC)

An oil shortage is coming says Goldman Sachs, because firms cannot fully invest in future production. Global oil majors are increasingly looking to invest in lower-carbon areas of the energy sector, as they react to pressure for cleaner energy, both from government policy and investors. “In the 2020’s we are going to have a clear physical shortage of oil because nobody is allowed to fully invest in future oil production,” Michele Della Vigna, Head of EMEA Natural Resources Research at Goldman Sachs told CNBC Friday. “The low carbon transition will come through higher, not lower oil prices,” he told CNBC’s “Squawk Box Europe.”

Della Vigna said “Big Oils” are starting to understand that if they want to be widely owned by investors, they need to show that they are serious about minimizing the amount of carbon in the atmosphere. The Goldman analyst said oil firms only had to look at the steep derating of coal companies over the last 5 years to understand the shift in investor sentiment. Della Vigna said until a transition to full renewables is made, the interim battle will be to own a greater market share of gas-based power. The analyst said with a huge capital cost of gas infrastructure, big state-backed companies looked best placed. “We talk about the new seven sisters emerging, dominating the global oil and gas market because nobody else can finance these mega-projects,” he said.

Brussels is risking its own powers.

• EU Version Of Budget Would Be Economic ‘Suicide’ For Italy – Tria (CNBC)

Brussels and Rome are in a constant back and forth over budget negotiations but analysts told CNBC that it is the markets that matter the most. Officials from the European Union (EU) and Italy have found themselves in a deadlock after the former’s economic forecasts showed the Italian economy would grow at a slower pace in the next two years than Rome thinks. The Italian government was quick to dismiss, blaming the EU for its “inadequate and partial” analysis of the country’s spending plans. These comments came after Brussels said earlier on the day that Italy’s 2019 deficit will reach 2.9 percent and not 2.4 percent as Rome insists.

Both sides have clashed over Italy’s 2019 budget plans after the anti-establishment government promised to increase spending, challenging European fiscal rules. On Friday, Italy’s Economy Minister Giovanni Tria said Brussels’ proposed deficit cuts would be “suicide” for the country’s economy. The unyielding stance from Rome triggered a rise in the yield spread between German and Italian debt, a common measure of risk for European investors. Analysts told CNBC the standoff looks set to continue, and that the EU is laying the ground to open the process that could eventually lead to sanctions — though no EU country has ever been fined for breaching spending limits.

[..] Yields on Italian debt have risen significantly since May — when the two populist parties, Five Star Movement and Lega, joined forces to form the next cabinet. Investors have fretted about the government’s spending plans given that Italy has a massive debt pile — the second largest in the EU at about 130 percent of GDP. In the last seven days alone, the yield on the 10-year Italian bond is up by about 12 basis points. Looking at its performance throughout the year, there has been an increase of about 172 basis points. “The true guardians of fiscal discipline will be, as usual, financial markets,” Lorenzo Codogno, chief economist at LC Macro Advisors said in a note to clients Thursday.

WIll Khashoggi’s death be good for something after all?

• US Won’t Refuel Saudi Coalition Planes Bombing Yemen Anymore (RT)

The Saudi-led coalition fighting in Yemen is opting to refuel its aircraft independently going forward, ending a controversial collaboration with US military assets. The Saudi Press agency released a statement on Saturday explaining that the coalition was able to “increase their capacity” for refueling their aircraft and would do so independently going forward. US Secretary of Defense Jim Mattis confirmed the decision was made in consultation with the US government. On Friday, Reuters reported, citing unnamed US officials, that Washington considering ending the refueling of coalition aircraft in Yemen, citing both the coalition’s own increased capabilities and growing international outrage over the human consequences of the war in Yemen.

Opposition to US collaboration with the Saudi coalition in Yemen has increased following the murder of journalist Jamal Khashoggi at the Saudi consulate in Istanbul. The Saudi-led coalition has been accused of targeting hospitals, water infrastructure, and other civilian targets, and raids on wedding parties and the recent bombing of a school bus have sparked international condemnation. The US and UK have both been criticized for continuing to sell arms to the coalition despite their targeting of civilians and alleged war crimes.

If ever you want to know who f*cked and f*cked up we are. Supermarkets can sell a million products for which a million acres of rainforests are burned and cut down. But when one of them decides not to play that game, its message is forbidden because it’s too political.

What a lovely Christmas ad. We should have tons of those. And of course you can ask how much of it is aimed at profits, but banning it is insane.

“There’s a human in my forest and I don’t know what to do. He destroyed all of our trees for your food and your shampoo.”

• UK Supermarket Anti-Palm Oil Ad Banned For Being Too Political (R.)

British supermarket chain Iceland has been banned from showing its Christmas advert on television because it has been deemed to breach political advertising rules. The discount supermarket company planned to use a Greenpeace-made animated short film, voiced by actress Emma Thompson, called “Rang-tan”, about the destruction of the rainforest caused by palm oil production and its impact on endangered orangutans. Iceland, which earlier this year announced its intention to remove palm oil from its products by the end of 2018, said the film fitted its agenda, leading to its decision to use the film as its Christmas advert.

The film was banned by Clearcast, which is responsible for the clearance of television ads before they are broadcast, on the grounds of it being seen to support a political issue. Under the 2003 Communications Act, an advert is deemed to contravene the bar on political advertising if it is “wholly or mainly of a political nature” or is “directed towards a political end”. Iceland, which trades from 900 stores and specializes in frozen food, said it hoped the advert would raise awareness and improve people’s understanding of rainforest destruction from palm oil production, which it said appears in more than 50 percent of all supermarket products.

One of the best Christmas TV ads in years has been banned for being “too political”. I don’t think they’ve worked out how social media works just yet. pic.twitter.com/GuzS70jaPk

— Rachael Swindon #GTTO (@Rachael_Swindon) November 9, 2018

Debt Rattle August 14 2018

Aug 142018

August 14, 2018 Posted by Raúl Ilargi Meijer at 7:37 am Finance Tagged with: Aegean, default, Italy, lira, mountain hare, Mueller, Musk, palm oil, primates, rupee, Russiagate, Turkey, VIPS 13 Responses »

Vincent van Gogh Vincent’s House in Arles (The Yellow House) 1888

• Turkey Will Be The Largest EM Default Of All Time (Russell Napier)

• ‘What Happens In Turkey Won’t Stay In Turkey’ (CNBC)

• Italy Expects Financial Market Attack In August (R.)

• The Price of Cheap Dollar/Euro Debts: Local Currencies Come Unglued (WS)

• Indian Rupee Drops To All-Time Low Against Dollar Over Turkish Crisis (Ind.)

• Close Up and Long Shot (Kunstler)

• Musk: “I Am Working With Silver Lake, Goldman On Taking Tesla Private” (ZH)

• The Law As Weapon (Paul Craig Roberts)

• Russia-Gate One Year After VIPS Showed a Leak, Not a Hack (CN)

• Greek Fishermen Accuse Turkish Boats of Opening Fire off Leros Island (GR)

• Turkish FM Accuses Greece Of Escalating Tensions In Aegean (K.)

• Palm Oil A New Threat To Africa’s Primates (BBC)

• Scotland’s Mountain Hare Population Is At Just 1% Of 1950s Level (G.)

Napier thinks Turkey will default on $500 billion in debt by imposing capital controls.

• Turkey Will Be The Largest EM Default Of All Time (Russell Napier)

Regular readers of the Fortnightly will know that The Solid Ground has long forecast a major debt default in Turkey. More specifically, the forecast remains that the country will impose capital controls enforcing a near total loss of US$500bn of credit assets held by the global financial system. That is a large financial hole in a still highly leveraged system. That scale of loss will surpass the scale of loss suffered by the creditors of Bear Stearns and while Lehman’s did have liabilities of US$619bn, it has paid more than US$100bn to its unsecured creditors alone since its bankruptcy. It is the nature of EM lending that there is little in the way of liquid assets to realize; they are predominantly denominated in a currency different from the liability, and also title has to be pursued through the local legal system.

Turkey will almost certainly be the largest EM default of all time, should it resort to capital controls as your analyst expects, but it could also be the largest bankruptcy of all time given the difficulty of its creditors in recovering any assets. So the events of last Friday represent only the end of the beginning for Turkey. The true nature of the scale of its default and the global impacts of that default are very much still to come. Strong form capital controls produce a de facto debt moratorium, and very rapidly investors realize just how little their credit assets are worth. A de jure debt moratorium at the outbreak of The Great War in 1914 bankrupted almost the entire European banking system – it was saved by mass government intervention.

While the imposition of capital controls in recent years has hit selected investors hard, in Iceland, Cyprus, Greece and key emerging markets, there has been nothing of this size and it is to be fully borne by financial institutions who believe they hold not just valuable credit assets but actually liquid credit assets! The loss of hundreds of billions of assets recently considered liquid by global financial institutions, through the de facto debt moratorium of capital controls, will be a huge shock to the global financial system.

Turkey=corporate debt. How do you bail that out?

• ‘What Happens In Turkey Won’t Stay In Turkey’ (CNBC)

The markets have seen much of this movie before: a heavily indebted country finds itself in crisis, the currency plunges and talk quickly turns to contagion and, ultimately, an expensive globally financed bailout. In Turkey’s case, the plot line is a little different, however. Where the other debt crises generally involved government borrowing, Turkey’s is mostly a corporate story, making the bailout mechanics more complicated and thus raising fears that what started in a small country with only marginal systemic importance on its face could quickly escalate. “How can a country where the entire market cap of Turkish equities traded on the Istanbul Stock exchange is less than the market cap of Netflix wreak such havoc? It is all about the direct and indirect impacts,” wrote Katie Nixon, chief investment officer for wealth management at Northern Trust.

“There are certain emerging market countries with relatively weak currencies and a heavy reliance on external (predominately dollar based) financing. The fear is that what happens in Turkey won’t stay in Turkey.” Nixon said that while the crisis does not appear to have major global implications, a strong U.S. dollar coupled with weakening emerging market currencies could fuel the problem. To date, the debt emergencies in Greece, Cyprus, Italy and other euro zone countries — not to mention Argentina, Malaysia and perhaps Pakistan before long — have had limited global spillovers. Several required bailout loans from the IMF, an organization that gets 17.5 percent of its funding from the U.S.

Low market volumes in summer make an attack easier to execute.

• Italy Expects Financial Market Attack In August (R.)

Speculators will probably attack Italian financial markets this month but the country has the resources to defend itself, a senior and highly influential government official said in a newspaper interview on Sunday. Giancarlo Giorgetti, undersecretary in the prime minister’s office and a leading light in the far-right League party, said thin summer trading volumes helped fuel market assaults. “I expect an attack (in August),” Giorgetti told Libero. “The markets are populated by hungry speculative funds that choose their prey and pounce … In the summer the market volumes are small, you can lay the groundwork for aggressive initiatives against countries. Look at Turkey.”

Turkish markets slumped last week on growing concerns over the country’s economy and political leadership. Italian assets have also come under strain in recent weeks, with investors concerned that the governing coalition, made up of the League and the anti-establishment 5-Star Movement, might tear up EU fiscal rules to pay for big-spending budget plans. “If the (market) storm comes, we will open our umbrella. Italy is a big country and has the resources to react, thanks in part to its large amount of private savings,” said Giorgetti, who is seen as a moderating force within the League. Quoting a report by bankers’ federation Fabi, Italian newspapers said on Sunday household savings in Italy totaled some 4.4 trillion euros against 2.2 trillion in 1998.

The reason for all the trouble? Cheap central bank credit.

• The Price of Cheap Dollar/Euro Debts: Local Currencies Come Unglued (WS)

Turkey has its own sets of problems and isn’t even seriously trying to prop up its currency. Now global bondholders are clamoring for the IMF to step in and calm the waters around the currency crisis in Turkey that has turned into a debt crisis that is now dragging some European banks through the dirt. Those global bondholders want the IMF to lend Turkey money to bail out Turkey’s bondholders to put an end to the turmoil and torture in emerging markets bonds that were so hot just eight months ago. In return for an IMF bailout of its bondholders, Turkey would have to follow the IMF’s program, slash its expenses, including social expenses, and curtail its crazy borrowing binge. But no go.

Instead of trying to address the problem, or beg the IMF for a bailout, the Turkish government has heaped scorn on the West. In return, the Turkish lira plunged another 8% against the dollar on Monday, to 7.04 lira to the dollar. Seen the other way around, as the chart below shows, the value of 1 lira has now dropped to 14.4 US cents, from 25 cents just four months ago, which, if nothing else, tells people to go figure out how to invest in gold and silver. Monday’s drop brings the grand collapse over the past three days to 24%, and over the past four months to 43%.

After nine years of experimental monetary policies in the US, Europe, Japan, and elsewhere, the Emerging Market economies have become addicted to this debt borrowed in a hard currency that they cannot inflate away. In Turkey, this cheap debt – cheap even for junk-rated issuers such as the government of Turkey – funded a construction boom in the property sector. This construction boom has been crucial to the economy – which is why the government is trying to ride this bull all the way. Turkey’s inflation is surging. In July, annual inflation reached 16%, the highest since January 2004. Inflation is what ultimately destroys a currency. But it’s not yet 30% as in Argentina, and perhaps the government thinks it still has some leeway.

Are you calling New Zealand an emerging market?

• Indian Rupee Drops To All-Time Low Against Dollar Over Turkish Crisis (Ind.)

The Indian currency has dropped to an all-time low against the dollar, while the New Zealand dollar has slumped to two-year lows as emerging markets feel the effects of the crisis in Turkey. Investors have instead moved towards safe haven currencies such as the yen, which surged to a six-week high, and the Swiss franc, which jumped close to a one-year high against the euro. The Indian central bank reportedly intervened to prevent a sharp drop in the rupee’s value, however, it did little to stem the decline, and the currency fell to 69.62 rupees per dollar. The New Zealand dollar has also felt the effects of the Turkish crisis, dropping below $0.66 for the first time in two years over the weekend. Meanwhile, the euro fell against the dollar to $1.14, as investors try to work out how badly European banks might be affected by the problems in Turkey, with the Spanish, French, and Italian in particular all hugely exposed to Turkish debt.

“President Trump’s tariff monkeyshines are shoving the Chinese banking system up against a wall of utterly irresolvable insolvency problems..”

• Close Up and Long Shot (Kunstler)

Who cares about the currency of a second-rate player in the global economy? A lot of SIFIs (“systemically important financial institutions”) otherwise known as Too-Big-To-Fail banks. That’s who. Deutsche Bank’s stock dropped over 6 percent when the Turkish Lira tanked on Friday. Turkey’s nickname since the collapse of the Ottoman Empire in the 1920s has been “the sick man of Europe” and Deutsche Bank in the post-2008-crash era is widely regarded as the sick man of SIFI banks. One analyst wag downgraded its status a year ago to “dead bank walking.” Its balance sheet was a Cave of Winds littered with the moldering skeletons of malinvestment.

If the European Central Bank (aka Germany) has to bail out DB, all bets are off for the Euro, which was showing serious signs of distress Friday. And who is going to bail out Turkey? If the IMF is your go-to vehicle, then you mean US taxpayers. Anyway, Turkey’s Lira is only one of several Emerging Market currencies whose hands have been called at the global poker table, where the four-flushers are getting flushed out. The Russian ruble was another one, ostensibly to the delight of America’s Destroy-Russia-at-All-Costs faction. China is also having to play a round of super Three Card Monte with its currency, the yuan.

President Trump’s tariff monkeyshines are shoving the Chinese banking system up against a wall of utterly irresolvable insolvency problems and threatening the stability of Xi Jinping’s one-party government. The Chinese export trade is at the heart of the world’s current economic arrangements. If you pull it out of the globalism machine, the machine will stop. It is going to stop one way or another anyway, but the gathering crisis of autumn 2018 will hasten that. All of this is happening because the whole world can’t handle the debts it has racked up, and the whole world knows it. And knowing it, they also know that their debt-based currencies are worthless. And knowing that, they also know that absolutely everybody else is broke and unable to meet their obligations. That is some dangerous knowledge.

Will Musk get away with not following the rules?

• Musk: “I Am Working With Silver Lake, Goldman On Taking Tesla Private” (ZH)

Update 2: And here things get bizarre because according to Reuters, Silver Lake is not currently discussing participating as an investor in Elon Musk’s proposed take-private deal for Tesla, citing an unidentified person. Reuters also adds that Silver Lake is offering assistance to Musk without compensation and hasn’t been hired as financial adviser in an official capacity.

Update: in a tweet sent out on Monday evening, Musk said the he was working with Silver Lake and Goldman Sachs as financial advisors, as well as Wachtell Lipton as legal advisors, on his “proposal” to take Tesla private.

It was not immediately clear why Silver Lake, an investor, is serving as a financial advisor, nor was it clear why Musk defined the “going private” transaction as merely a proposal when he previously classified it as a firm deal, with “secured funding.” The tweet followed a blog post by Musk in which he finally offered more details on his tweet that he had “funding secured” to take Tesla Inc. private, however as Bloomberg echoed our skepticism from earlier (see below) , “it’s unlikely to get U.S. regulators off his back.” Musk’s elaboration doesn’t wash away the investor confusion he triggered a week ago by failing to provide evidence that he had financing. Without more information, investors were left guessing at how far along negotiations on a bid had progressed.

Musk’s fresh disclosure might even help the Securities and Exchange Commission show that his initial tweet was misleading, lawyers said. Bloomberg quoted Keith Higgins, a Ropes & Gray lawyer who said that “a cautious lawyer would have said you shouldn’t have said ‘funding secured’ unless you had a commitment letter,” which Musk clearly did not have, and certainly not from the Saudi Wealth Fund which as Musk admitted, needed to do more due diligence and analysis and had yet to conduct an “internal review process for obtaining approvals.” John Coffee, director of the Center on Corporate Governance at Columbia Law School, agreed. He said Monday’s post indicates Musk was being overly bullish last week, potentially increasing his vulnerability in any SEC investigation. “He clearly had not secured funding at the time of his tweet – he concedes that obliquely,” Coffee said.

How Mueller arrived at Manafort.

• The Law As Weapon (Paul Craig Roberts)

Robert Mueller is supposed to be investigating Russiagate, which has been shown to be a hoax concocted by former CIA director John Brennan, former FBI director James Comey, and current deputy Attorney General Rod Rosenstein. As Russiagate is a hoax, Mueller has not been able to produce a shred of evidence of the alleged Trump/Putin plot to hack Hillary’s emails and influence the last presidential election. With his investigation unable to produce any evidence of the alleged Russiagate, Mueller concluded that he had to direct attention away from the failed hoax by bringing some sort of case against someone, knowing that the incompetent and corrupt US media and insouciant public would assume that the case had something to do with Russiagate.

Mueller chose Paul Manafort as a target, hoping that faced with fighting false charges, Manafort would make a deal and make up some lies about Trump and Putin in exchange for the case against him being dropped. But Manafort stood his ground, forcing Mueller to go forward with a false case. Manafort’s career is involved with Republican political campaigns. He is charged with such crimes as paying for NY Yankee baseball tickets with offshore funds not declared to tax authorities and with attempting to get bank loans on the basis of misrepresentation of his financial condition. In the prosecutors’ case, Manafort doesn’t have to have succeeded in getting a loan based on financial misrepresentation, only to be guilty of trying.

Two of the people testifying against him have been paid off with dropped charges. Mueller’s investigation is restricted to Russiagate. In other words, Mueller has no mandate to investigate or bring charges unrelated to Russiagate. In my opinion, Muller gets away with this only because the deputy Attorney General is in on the Russiagate plot against Trump. Mueller and Rosenstein know that they can count on the presstitutes to continue to deceive the public by presenting the Manafort trial as part of Russiagate.

But people like Mueller still claim a hack, because otherwise they can’t involve Russia.

• Russia-Gate One Year After VIPS Showed a Leak, Not a Hack (CN)

A year has passed since highly credentialed intelligence professionals produced the first hard evidence that allegations of mail theft and other crimes attributed to Russia rested on purposeful falsification and subterfuge. The initial reaction to these revelations—a firestorm of frantic denial—augured ill, and the time since has fulfilled one’s worst expectations. One year later we live within an institutionalized proscription of proven reality. Our discourse consists of a series of fence posts and taboos. By any detached measure, this lands us in deep, serious trouble. The sprawl of what we call “Russia-gate” now brings our republic and its institutions to a moment of great peril—the gravest since the McCarthy years and possibly since the Civil War. No, I do not consider this hyperbole.

Much has happened since Veteran Intelligence Professionals for Sanity published its report on intrusions into the Democratic Party’s mail servers on Consortium News on July 24 last year. Parts of the intelligence apparatus—by no means all or even most of it—have issued official “assessments” of Russian culpability. Media have produced countless multi-part “investigations,” “special reports,” and what-have-yous that amount to an orgy of faulty syllogisms. Robert Mueller’s special investigation has issued two sets of indictments that, on scrutiny, prove as wanting in evidence as the notoriously flimsy intelligence “assessment” of January 6, 2017. Indictments are not evidence and do not need to contain evidence. That is supposed to come out at trial, which is very unlikely to ever happen.

Nevertheless, the corporate media has treated the indictments as convictions. Numerous sets of sanctions against Russia, individual Russians, and Russian entities have been imposed on the basis of this great conjuring of assumption and presumption. The latest came last week, when the Trump administration announced measures in response to the alleged attempt to murder Sergei and Yulia Skripal, a former double agent and his daughter, in England last March. No evidence proving responsibility in the Skripal case has yet been produced. This amounts to our new standard. It prompted a reader with whom I am in regular contact to ask, “How far will we allow our government to escalate against others without proof of anything?” This is a very good question.

I hinted at this in my article Sunday. Many Greek islands are off the Turkish coast, as per the 1923 Lausanne Treaty. If Erdogan wants to push nationalism -and he does-, this may be his best bet. In essence, the Treaty finally ended the Ottoman Empire, and a lot more territory was lost, but this part is what Turks will be receptive to. One other piece on the Treaty: Turkey ceded all claims to Cyprus. We know how that fared.

• Greek Fishermen Accuse Turkish Boats of Opening Fire off Leros Island (GR)

Greek fishermen have reported that they were fired upon by Turkish fishing boats near Kalapodi islet, 300 meters off the coast of Leros island. Two Greek seamen, owners of fishing boats, spoke to Alpha television saying that the Turkish boats were inside Greece’s territorial waters on Sunday when their crews shot at them. They also said that, since July, Turkish fishing boats have repeatedly intruded upon Greek waters to fish in the area. The Greek fishermen said that usually they call the coast guard upon seeing the Turkish boats; the intruders are forced to exit Greek waters upon the arrival of coast guard ships. This time, however, Leros fisherman Kostas Tsiftis told Alpha, the crew of the Turkish boat fired gunshots at them. He also said that the gunfire was from an automatic weapon because some of the shots were repeated.

The Greek fishermen were forced to leave the area and called the Hellenic Coast Guard. Upon the arrival of two coast guard patrol vessels, the Turkish fishing boats moved towards international waters. The fishermen noted that even though they are used to provocative acts by Turkish fishermen, Sunday’s incident was unprecedented. “We heard six shots. The two of them, the third and the fourth, were repeated. The gun was neither a hunting rifle, nor a revolver,” said Lefteris Giannoukas, who was in one of the Greek boats. “The Turkish fishermen were about 200 meters away. This is the first time that the Turks shot at us. Of course we were afraid, we did not expect it,” Tsiftis said. The Greek fisherman noted that this is the first time the Turkish boats came this close.

And there you go. For domestic consumption.

• Turkish FM Accuses Greece Of Escalating Tensions In Aegean (K.)

Greece is responsible for escalating tension in Aegean and Mediterranean, even though Turkey has always stood by Greeks in their times of difficulty, Turkey’s foreign minister has told his country’s ambassadors. “In their difficult days, we are always at their side. But in the Aegean and the Mediterranean, they are again increasing tension. They do bizarre things, which are not acceptable. Don’t we all want the eastern Mediterranean to become a region of peace and prosperity?” Mevlut Cavusoglu told the 10th conference of Turkish ambassadors. He also called for a new process to resolve the Cyprus issue, blaming the Republic of Cyprus for the impasse. “In order to reach a solution in Cyprus, a new process must be launched. Greek Cypriots do not want to cooperate. And this we saw last year. We saw it in Geneva, we saw it in Crans-Montana,” Tsavousoglou said. And “Greece is no different,” he alleged.

It’s devastated Borneo. Now it’s coming for Africa. Next up Amazon?

• Palm Oil A New Threat To Africa’s Primates (BBC)

Endangered monkeys and apes will almost certainly face new risks if Africa becomes a big player in the palm oil industry. That is the message of a study looking at how large-scale expansion of the oil crop in Africa might affect the continent’s rich diversity of wildlife. Most areas suitable for growing palm oil are key habitats for primates, according to researchers. They say consumers can help by choosing sustainably-grown palm oil. Ultimately, this may mean paying more for food, cosmetics and cleaning products that contain the oil, or limiting their use. “If we are concerned about the environment, we have to pay for it,” said Serge Wich, professor of primate biology at Liverpool John Moores University, and leader of the study. “In the products that we buy, the cost to the environment has to be incorporated.”

[..] Many companies growing palm oil are looking to expand into Africa. This is a worry for conservationists, as potential plantation sites are in areas of rich biodiversity. They are particularly worried about Africa’s primates. Nearly 200 primate species are found in Africa, many of which are already under threat. Habitat destruction is one of the main reasons why all great apes are at the edge of extinction. The introduction of palm oil plantations to Africa is expected to accelerate the habitat loss. [..] The study found that while oil palm cultivation represents an important source of income for many tropical countries, there are few opportunities for compromise by growing palm oil in areas that are of low importance for primate conservation.

“We found that such areas of compromise are very rare throughout the continent (0.13 million hectares), and that large-scale expansion of oil palm cultivation in Africa will have unavoidable, negative effects on primates,” said the research team. To put that figure into context, 53 million hectares of land will be needed by 2050 to grow palm oil in order to meet global demand.

An entire article without naming any numbers, only percentages. How many mountain hares are there in Scotland? 2, 20, 2 million?

• Scotland’s Mountain Hare Population Is At Just 1% Of 1950s Level (G.)

The number of mountain hares on moorlands in the eastern Scottish Highlands has fallen to less than 1% of the level recorded more than 60 years ago, according to a long-term study. The Centre for Ecology & Hydrology and the RSPB teamed up to study counts of the animals over several decades on moorland managed for red grouse shooting and nearby mountain land. From 1954 to 1999, the mountain hare population on moorland sites decreased by almost 5% every year, the study found, saying the long-term decline was likely to be due to land use changes such as the loss of grouse moors to conifer forests. However, from 1999 to 2017 the scale of the “severe” moorland declines increased to over 30% every year, leading to counts last year of less than 1% of original levels in 1954, researchers said.

On higher, alpine sites, numbers of mountain hares fluctuated, but increased overall until 2007, and then declined, although not to the lows seen on the moorland sites, the study noted. The report stated: “The study found long-term declines in mountain hare densities on moorland, but not alpine, sites in the core area of UK mountain hare distribution in the eastern Highlands of Scotland. “These moorland declines were faster after 1999 at a time when hare culling by grouse moor managers with the specific aim of tick and LIV [Louping ill virus, which is spread by ticks] control has become more frequent.” Gamekeepers and estate managers claim culls limit the spread of ticks, protect trees and safeguard fragile environments, and a policy of voluntary restraint is in place. However, campaigners believe the practice is cruel and unnecessary.

Debt Rattle June 11 2018

Jun 112018

June 11, 2018 Posted by Raúl Ilargi Meijer at 9:47 am Finance Tagged with: apocalypse, austerity, Bilderberg, Cyprus, debt, Erdogan, Italy, migrants, palm oil, Road Less Traveled, Saudi, Trump, truth 6 Responses »

Pierre-Auguste Renoir Les parapluies 1880-86

• Debt Clock Ticking (Mauldin)

• Southern Mayors Defy Italian Coalition To Offer Safe Port To Migrants (G.)

• Italy’s New Finance Minister Rules Out Leaving Euro (Pol.eu)

• In The Western World Truth Is An Endangered Species (PCR)

• Will Bilderberg Still Be Relevant As The Future Of War Is Transformed? (G.)

• Saudi Arabia Suffers Shock Collapse In Inward Investment (F.)

• French Farmers Start Refinery Blockade Over Palm Oil Imports (R.)

• Our Generation Is Presiding Over An Ecological Apocalypse (G.)

• Erdogan Ally Says ‘Cyprus Is Turkish And Will Remain So’ (K.)

• Austria Closing Mosques May Mean ‘War Between Cross & Crescent’ – Erdogan (RT)

• Greece Puts Men Accused Over Turkey Coup Attempt Under Armed Guard (G.)

• New Austerity Bill Hits Greeks With €5.1 Billion More Cuts Until 2022 (KTG)

• Last Exit to the Road Less Traveled (JD Alt)

As the G7 leaders have a few days to lick their wounds, and all attention will continue to be on Trump, I’ll leave all that alone for now. One last thing: hope they understand now that ganging up on Trump is not a good idea. It would be good if the Democrats and media understand that too. They must all reinvent themselves.

Let’s turn to debt: “There is no set of math that works to pay this off.”

• Debt Clock Ticking (Mauldin)

“Modern slaves are not in chains, they are in debt.” – Anonymous. You can find hundreds of quotes on the Internet discussing the problems of debt. Debt traps borrowers, lenders, and innocent bystanders, too. If debt were a drug, we would demand it be outlawed. The advantage of debt is it lets you bring the future into the present, buying things you couldn’t afford if you had to pay full price now. This can be good or bad, depending on what you buy. Going into debt for education that will raise your income, or for factory equipment that will increase your output, can be positive. Debt for a tropical vacation, probably not.

And that’s our core economic problem. The entire world went into debt for the equivalent of tropical vacations and, having now enjoyed them, realizes it must pay the bill. The resources to do so do not yet exist. So, in the time-honored tradition of lenders everywhere, we extend and pretend. But with our ability to pretend almost gone, we’re heading to the Great Reset. I’ve been analogizing our fate to a train wreck you know is coming but are powerless to stop. You look away because watching the disaster hurts, but it happens anyway. That’s where we are, like it or not.

And we don’t even really like to talk about it in polite circles. In a private email conversation this week, which must remain anonymous, this pithy line jumped out at me: “The total of Federal (remember they do not use GAAP) debt, state debt, and city debt [unfunded liabilities included] exceeds $200 trillion dollars. There is no set of math that works to pay this off. Let me be sure it’s heard by repeating it: There is no set of math that works to pay this off. Therefore, there has to be some form of remediation. This conversation is uncomfortable, so it is avoided.”

Hopeful but for now not practical. The solution is in Africa itself. Let Salvini work on that, instead of this sort of stunts.

• Southern Mayors Defy Italian Coalition To Offer Safe Port To Migrants (G.)

Mayors across the south of Italy have pledged to defy a move by the new Italian government – an alliance of the far right and populists – to prevent a rescue boat with 629 people on board from docking in the Sicilian capital. But the mayors’ defiance appears unlikely to serve any practical purpose without the direct support of the Italian coastguard. In the first evidence of the new government’s hardline approach, the interior minister, Matteo Salvini, said on Sunday that all Italian ports were closed to the rescue boat, Aquarius. The Maltese government rejected a request to take the boat, saying international law required that the migrants should be taken to Italian ports.

Salvini, the leader of the League, a far-right party, wrote on Facebook: “Malta takes in nobody. France pushes people back at the border, Spain defends its frontier with weapons. From today, Italy will also start to say no to human trafficking, no to the business of illegal immigration.” Leoluca Orlando, the mayor of Palermo, said he was ready to open the city’s seaport to allow the rescued migrants to safely disembark. “Palermo in ancient Greek meant ‘complete port’. We have always welcomed rescue boats and vessels who saved lives at sea. We will not stop now,” Orlando said. “Salvini is violating the international law. He has once again shown that we are under an extreme far-right government.’’

Other mayors in Italy’s south, including those in Naples, Messina and Reggio Calabria, also said they were ready to disobey Salvini’s order and allow Aquarius to dock and disembark in their seaports. A representative of Doctors Without Borders said the mayors’ remarks were “nice but not practical” because it was standard practice to wait for the Italian coastguard, which is under the control of the Italian government, to allow a ship to dock.

Why the confusion between Finance Minister and Economy Minister?

• Italy’s New Finance Minister Rules Out Leaving Euro (Pol.eu)

Italy’s new economy minister Giovanni Tria ruled out leaving the euro and said he would focus on structural reforms over deficit spending. “The position of the executive is clear and unanimous,” Tria told Italian newspaper Corriere della Sera in his first major interview since the country’s populist government was sworn in at the start of this month. “There isn’t any discussion on a plan to leave the euro,” he said, adding that “the government is determined, in any event, to prevent market conditions which push towards the exit to be materialized.”

Tria’s comments appeared designed to reassure financial markets — and to calm fears in the European Commission and among other EU governments that the new administration would implement anti-euro policies and clash with Brussels. Tria told Corriere that the government’s strategy would be “growth and employment” with a program “based on structural reforms,” and that his country would also “make progress on many aspects of the European governance program and banking union.” Though the new government has not adopted a policy of leaving the euro, some members of the coalition including Matteo Salvini, the new interior minister, have criticized the currency in the past and others have floated the idea of a referendum on Italy quitting the monetary union.

Support for Assange is mounting. But not nearly enough yet. This must grow the same way Free Nelson Mandela did

• In The Western World Truth Is An Endangered Species (PCR)

Nowhere in the Western world is truth respected. Even universities are imposing censorship and speech control. Governments are shutting down, and will eventually criminalize, all explanations that differ from official ones. The Western world no longer has a print and TV media. In its place there is a propaganda ministry for the ruling elite. Whistleblowers are prosecuted and imprisoned despite their protection by federal statue. The US Department of Justice is a Department of Injustice. It has been a long time since any justice flowed from the DOJ. The total corruption of the print and TV media led to the rise of Intermet media such as Wikileaks, led by Julian Assange, a prisoner since 2012.

Assange is an Australian and Ecuadorian citizen. He is not an American citizen. Yet US politicians and media claim that he is guilty of treason because he published official documents leaked to Wikileaks that prove the duplicity and criminality of the US government. It is strickly impossible for a non-citizen to be guilty of treason. It is strickly impossible under the US Constitution for the reporting of facts to be spying. The function of the media is to expose and to hold accountable the government. This function is no longer performed by the Western print and TV media. Washington wants revenge and is determined to get it.

If Assange were as corrupt at the New York Times, Washington Post, CNN, National Public Radio, MSNBC, etc., he would have reported the leaker to Washington, not published the information, and retired as a multi-millionaire with Washington’s thanks. However, unfortunately for Assange, he had integrity. Integrity today in the Western world has no value. You cannot find integrity in the government, in the global corporations, in the universities and schools, and most certainly not in the media.

President #Trump: "Excitement is in the air."pic.twitter.com/dQ6NSgHirR

— Praying Medic (@prayingmedic) June 11, 2018

“What the politicians at Bilderberg ought to realise, when they take a break from brainstorming war to enjoy the buffet, is that they are the buffet.”

• Will Bilderberg Still Be Relevant As The Future Of War Is Transformed? (G.)

This year’s Bilderberg summit is a council of war. On the agenda: Russia and Iran. In the conference room: the secretary general of Nato, the German defence minister, and the director of the French foreign intelligence service, DGSE. They are joined in Turin, Italy, by a slew of academic strategists and military theorists, but for those countries in geopolitical hotspots there is nothing theoretical about these talks. Not when the prime ministers of Estonia and Serbia are discussing Russia, or Turkey’s deputy PM is talking about Iran. The clearest indication that some sort of US-led conflict is on the cards is the presence of the Pentagon’s top war-gamer, James H Baker.

He is an expert in military trends, and no trend is more trendy in the world of battle strategy than artificial intelligence. Bilderberg is devoting a whole session to AI this year – and has invited military theorist Michael C Horowitz, who has written extensively on its likely impact on the future of war. Horowitz sees AI as “the ultimate enabler”. In an article published just a few weeks ago in the Texas National Security Review, he quotes Putin’s remark from 2017: “Artificial intelligence is the future, not only for Russia, but for all humankind. Whoever becomes the leader in this sphere will become the ruler of the world.”

Horowitz says “China, Russia, and others are investing significantly in AI to increase their relative military capabilities”, because it offers “the ability to disrupt US military superiority”. Global military domination is suddenly up for grabs – which brings us to the most intriguing item on this year’s Bilderberg agenda: “US world leadership”. [..] What the politicians at Bilderberg ought to realise, when they take a break from brainstorming war to enjoy the buffet, is that they are the buffet. There’s not much dignity in undermining democracy. But there is a huge pile of money, and for many people that’s enough.

Just as MSB is trying to invest a lot in his ‘new’ Saudi Arabia.

• Saudi Arabia Suffers Shock Collapse In Inward Investment (F.)

Inward investment into Saudi Arabia collapsed last year, according to newly published data from the UN Conference on Trade and Development (UNCTAD), raising serious questions about the prospects for the economic reform agenda being pursued by Crown Prince Mohammed bin Salman (MBS). According to the latest UNCTAD World Investment Report, published on June 7, foreign direct investment (FDI) into Saudi Arabia last year amounted to just $1.4 billion, down from $7.5bn the year before and as much as $12.2bn in 2012. The precipitous fall means the country was outranked by far smaller economies in terms of its ability to attract international investment last year, with the likes of Oman and Jordan overtaking it in 2017, with inward FDI of $1.9bn and $1.7bn respectively.

The situation is equally stark when one looks at the amount of investment coming to Saudi Arabia compared to the rest of the surrounding West Asia region. While the kingdom accounted for around a quarter of total regional FDI between 2012 and 2016, last year it attracted just 5.6% of the regional total. While the Saudi economy has been losing out, others have been gaining a bigger piece of the pie. The UAE has seen its share of regional FDI more than double over the past six years, from 19% in 2012 to 41% in 2017. And even Qatar – which has been the subject of an economic boycott by Bahrain, Egypt, Saudi Arabia and the UAE since June last year – managed to increase its FDI take in 2017, attracting $986m compared to $774m a year earlier.

UNCTAD attributed the fall in investment into Saudi Arabia to significant divestments and negative intra-company loans by foreign multinationals. As an example, it pointed to the UK/Dutch Shell Group which sold its 50% stake in the Sadaf petrochemicals venture to its partner Saudi Basic Industries Corporation (Sabic) for $820m in August. However, the report also notes that FDI to Saudi Arabia has been contracting since the global financial crisis in 2008/09. And although there has been a similar pattern across the region – inflows to West Asia have fallen in most years since hitting a peak of $85bn in 2008 – the performance of Saudi Arabia last year is still appreciably worse than any other economy in the immediate neighbourhood. It is also far worse than the global picture – worldwide FDI inflows were down 23% last year to $1.43 trillion.

Palm oil destroys rainforests and orangutans. And you want to burn it?

• French Farmers Start Refinery Blockade Over Palm Oil Imports (R.)

French farmers began a blockade of oil refineries and fuel depots on Sunday evening over plans by Total to use imported palm oil at a biofuel plant, which have fanned farmer discontent over unfair competition. The Vatry fuel depot in the Marne region of northeastern France was the first to be blocked on Sunday evening as about 100 farmers set up barricades with tractors and mounds of rubble, a spokesman from the FNSEA farmers union told Reuters. At least five sites will be blocked on Sunday evening, with a total of 13 sites blocked from 9 a.m. Monday, Christiane Lambert, president of the FNSEA said in an interview with France Info television.

French oil and gas major Total, which operates five refineries and nine petrol depots in France, said late on Sunday that farmers have gathered at two depots and it had taken measures together with authorities, to limit disruptions. It urged clients not to rush to petrol stations to fill their tanks, which could spark panic buying and shortages. The French authorities last month gave Total permission to use palm oil as one of the feedstocks at its La Mede biofuel refinery in southern France, infuriating farmers who grow local oilseed crops such as rapeseed and environmentalists who blame palm oil cultivation for deforestation in southeast Asia.

[..] Palm oil has been widely criticized in Europe for environmental destruction and some lawmakers are pushing for a ban on its use in biofuel as part of new EU energy targets. The issue has caused friction with Indonesia and Malaysia, the world’s two largest palm oil producers, with Malaysian officials warning of trade repercussions that could affect a potential deal to buy French fighter jets. The refinery protests in France also illustrate a souring relationship between farmers in the EU’s biggest agricultural producer and the government of President Emmanuel Macron. Many farmers welcome the president’s call for fairer farmgate prices as part of a food chain review last year, but they have been angered by Macron’s attempt to phase out common weedkiller glyphosate before other EU countries.

“..among the most nature-depleted countries in the world..”

• Our Generation Is Presiding Over An Ecological Apocalypse (G.)

He’s currently enjoying a great bounty of nature, from tree-climbing slugs to blackbird-gobbling little owls on this year’s Springwatch, but Chris Packham warns that we are presiding over “an ecological apocalypse” and Britain is increasingly “a green and unpleasant land”. The naturalist and broadcaster is urging people to join him next month on a 10-day “bioblitz”, visiting road verges, farmland, parks, allotments and community nature reserves across the country to record what wildlife remains – from butterflies to bryophytes, linnets to lichens. According to Packham, British people have normalised a “national catastrophe” and only see a wealth of wildlife in nature reserves, with the wider countryside bereft of life.

“Nature reserves are becoming natural art installations,” he said. “It’s just like looking at your favourite Constable or Rothko. We go there, muse over it, and feel good because we’ve seen a bittern or some avocets or orchids. But on the journey home there’s nothing – only wood pigeons and non-native pheasants and dead badgers on the side of the road. “It’s catastrophic and that’s what we’ve forgotten – our generation is presiding over an ecological apocalypse and we’ve somehow or other normalised it.” Packham said he looked at the rolling hills beyond this year’s setting for Springwatch on the National Trust’s Sherborne estate in the Cotswolds and despaired. “How many wildflowers can we see? None. Where’s the pink of ragged robin? Where’s the yellow of flag iris? The other colours are not there. It’s not green and pleasant – it’s green and unpleasant.”

Packham’s recent tweets have gone viral after he commented on the absence of insects during a weekend at his home in the middle of the New Forest national park. He did not see a single butterfly in his garden and said he sleeps with his windows open but rarely finds craneflies or moths in his room in the morning whereas they were commonplace when he was a boy. Since Packham first became passionate about birds, in 1970, Britain has lost 90 million wild birds, with turtle doves (down 95% since 1990) hurtling towards extinction. The State of Nature 2016 report described Britain as being “among the most nature-depleted countries in the world”, with scientific data from more than 50 conservation and research organisations revealing that 40% of all species are in moderate or steep decline.

Opposition leader is a government ally.

• Erdogan Ally Says ‘Cyprus Is Turkish And Will Remain So’ (K.)

The leader of Turkey’s nationalist MHP opposition party Devlet Bahceli, an ally of Turkish President Recep Tayyip Erdogan, attacked Greece and Cyprus during an election rally in Izmir on Sunday, claiming “Cyprus is Turkish.” Bahceli was commenting on Greek criticism over an MHP campaign video that depicts the island of Cyprus as Turkish territory. “What else are we to do? Cyprus is Turkish and will remain so,” he was quoted as saying by Turkish conservative newspaper Yeni Safak. He went on to “warn” Greeks not to forget “the days when their grandfathers drowned in the bottom of the sea,” and accused the Greek government of “playing games” in the Aegean.

Ehh.. racist it is not.

• Austria Closing Mosques May Mean ‘War Between Cross & Crescent’ – Erdogan (RT)

Austria’s move to close mosques and expel “foreign-funded” imams has infuriated Turkish President Recep Tayyip Erdogan, warning of a war “between cross and crescent” and threatening that Ankara will not sit idle. “These measures taken by the Austrian prime minister are, I fear, leading the world towards a war between the cross and the crescent,” Erdogan said in a speech in Istanbul on Sunday. Crescent, which can be seen on mosques and other Muslim entities, symbolizes Islamic religion since time immemorial. “They say they’re going to kick our religious men out of Austria. Do you think we will not react if you do such a thing?” he asked, quoted by AFP. “That means we’re going to have to do something,” Erdogan added without elaborating.

Earlier this week, Austrian Interior Minister Herbert Kickl from the right-wing FPO party announced that the country vows to close seven mosques and potentially expel dozens of Turkish-funded imams and their families in Austria’s crackdown on “political Islam.” Austrian officials, including Chancellor Sebastian Kurz, claimed the move was to battle radicalization and growing ‘parallel societies’. However, this explanation did not sit well with Ankara. “Austria’s decision to close seven mosques and expel imams is a reflection of the Islamophobic, racist and discriminatory wave in this country,” Ibrahim Kalin, the spokesman of Tayyip Erdogan, commented on Twitter.

A crazy situation. Turkey can not be allowed to enter Greek territory to abduct or murder anyone.

• Greece Puts Men Accused Over Turkey Coup Attempt Under Armed Guard (G.)

Greece has put in place the “greatest possible” measures to protect eight Turkish commandos accused of being coup plotters after Ankara said it would do everything possible to bring them back. A week after the men were freed from detention, Athens said they were under 24/7 guard at an undisclosed location, for fear of retaliation. The admission came despite mounting tensions with Ankara, which has scrapped a refugee readmission deal with Athens, arguing the soldiers participated in the abortive coup against Recep Tayyip Erdogan in July 2016. Greece’s deputy defence minister, Fotis Kouvelis, told the Guardian: “We are enforcing the greatest possible measures to secure their safety in a place which for obvious reasons will remain unknown.

“We haven’t forgotten what happened in our region a few months ago.” Kouvelis was referring to the enforced removal from Kosovo of six Turkish citizens also denounced as followers of the US-based cleric Fethullah Gülen, who Ankara has blamed for orchestrating the putsch. Tensions over the eight men, who flew into Greece on a Black Hawk helicopter a day after the failed coup, have added to an increasingly fiery campaign ahead of in Turkey on 24 June. Friction with the west has escalated as the race appears to have tightened. At the weekend, Erdogan accused Austria of fomenting a religious war between “cross” and “crescent” after it raised the prospect of expelling Turkish Muslim clerics.

But Greece has been the focus of growing animus in Ankara. Turkey has consistently argued the eight men were involved in the putsch against Erdogan. The Greek supreme court has rejected any notion of sending the men back, saying they would not get a fair trial in Turkey, where a purge of the military and civil establishment continues. In April, the council of state, Greece’s highest administrative court, granted one of the eight commandos permanent asylum, despite objections by Alexis Tsipras’s leftist-led government. Similar judgments are expected to follow when verdicts are issued in the remaining cases.

Pile it on!

• New Austerity Bill Hits Greeks With €5.1 Billion More Cuts Until 2022 (KTG)

Greece submitted a draft bill to parliament late on Friday, a bill fully packed with austerity measures worth 5.1 billion euros and counter-measures worth 1.5 billion, in an effort to sweeten the bitter pill to thousands of pensioners and employees. The bill outlines reforms in the energy, pension and labor sectors as the government races to secure the last loans from its international bailout program, conclude the last program review and head to a so-called “clean exit” in August. The bill includes the country’s medium-term fiscal strategy framework through 2022, which foresees an average 2 percent annual growth and pledges to increase minimum wages and restore collective labor bargaining.

At the same time, the bill includes measures to expedite privatizations in the energy sector, the reduction of state spending on pensions and labor market reforms including arbitration when there is a dispute between employers and staff. • Pension cuts up to 18% to be implemented as of 2019. • Tax-free basis will be broadening to annual income of 5.686 euros, when EU’s poverty line is at 6,000. The measure to go into effect as of 2020. • Privatizations worth 3.9 billion euros
Lawmakers are expected to vote on the bill on upcoming Thursday, before the Eurogroup of June 21.

Athens is keen to pass a final review by its creditors ahead of a Eurogroup meeting on June 21, where it is also hoping for progress on a deal on further debt relief to be implemented after the current bailout program expires in August. If it gets the green light from the review and Eurogroup, it will receive about 12 billion euros ($14 billion) of new loans. [..] revenues will increase through the pension cuts, the changes in real estate objective value that will increase the property taxes, scrapping the decreased of Value Added Tax on all islands, scrapping the 15% discount on social security contributions as of 2019. • Pension cuts worth €2.9 billion annually. €1.2 billion will be cut from public sector pensions and €1.4 billion on private sector pensions. • Broadening the tax-free basis will bring revenues worth €1.9 billion.

h/t Lambert Strether

• Last Exit to the Road Less Traveled (JD Alt)

We now stand where two roads diverge. But unlike the roads in Robert Frost’s familiar poem, they are not equally fair. The road we have long been traveling is deceptively easy, a smooth superhighway on which we progress with great speed, but at its end lies disaster. The other fork of the road—the one less traveled by—offers our last, our only chance to reach a destination that assures the preservation of the earth. –Rachael Carson, Silent Spring What’s important to keep in mind in this quote from Rachael Carson’s 56-year-old warning shot over the bow of corporate civilization is that there are two roads being traveled now. We are no longer at a fork. The fork is half-a-century behind us. The goal is not to get the superhighway to somehow re-route itself and follow the path less traveled. It can’t.

The superhighway will, and must, continue accelerating in its inevitable direction, simply because the greed and power of the people driving that highway will not allow them to alter course. But if there is any truth to Rachael Carson’s warning (and there seems to be growing evidence of it) the other path—the Road Less Traveled—will become the surviving branch of our evolutionary diagram. The present goal, therefore, should be to create as many exits from the superhighway as possible—and to encourage and enable as many people as possible to take those exits to explore and follow the other path. Visualizing how we all got on this superhighway in the first place will be helpful to seeing the exit ramps. To make this visualization, it isn’t necessary to speculate about an ancient, human pre-history.

The process can be clearly seen and understood in a modern anecdote describing how one particular community of people joined the highway. I quote now from the book Fishing Lessons by Kevin M. Bailey*, where he retells author Robert Johannes’ story of fishermen in Palau, an island country in Micronesia. “Seafood was once abundant there. The Palauan fisherman never had trouble finding enough fish to satisfy their own and their village’s needs. The fisherman gave away the fish they didn’t eat to other villagers…. They lived in a state of ‘subsistence affluence.’ “…. After Japan colonized Palau in the 1920s the fishermen began to sell their fish to obtain attractive and exotic goods offered by the Japanese. The fishermen bought nets and motorized boats with the money, allowing them to catch more fish to sell in order to obtain more goods.

They fished harder to harvest more fish and visited more distant areas of the reef to find them. Over the years, the fish abundance dropped. “The fishermen bought even bigger boats to catch the vanishing fish, but to do that they had to borrow money. They had to sell all their fish to pay off their loans. They stopped giving them away in the villages; instead they sold them to the outsiders and to other villagers. Now the people in the village had to work for the money to buy their food…. “Pretty soon, there were not enough fish over the reefs for the fishermen to make payments on their loans, so the village sold their customary access rights to the fishing grounds. The people in the village began to eat imported fish in cans.”

Debt Rattle May 11 2018

May 112018

May 11, 2018 Posted by Raúl Ilargi Meijer at 8:33 am Finance Tagged with: Argentina, Brexit, China, collectivism, deal, FBI, Hubble Constant, Iran, Marx, orangutan, palm oil, revolution 8 Responses »

Pablo Picasso La lecture 1932

• ‘Everything’ in Argentina is 20% to 30% Overvalued – Lacalle (BI)

• About That FBI ‘Source’ (Strassel)

• The Art of Breaking a Deal (Escobar)

• China Walks A Fine Line In Iran (Dorsey)

• Capitalism Is Collectivist (CA)

• Karl Marx Sacrificed Logic On The Altar Of His Desire For Revolution (Keen)

• Theresa May Turns Brexit Into Role-Reversal Game (G.)

• Third of British Homeowners Priced Out Of Their Own Property (Ind.)

• Greece Sees Spike In Waivers Of Inheritance (K.)

• The Answer To Life, The Universe And Everything Might Be 73. Or 67 (G.)

• Palm Oil Producers Are Wiping Out Orangutans (G.)

“Obviously the economy will shrink, but it shrinks to reality..”

• ‘Everything’ in Argentina is 20% to 30% Overvalued – Lacalle (BI)

“Everything” in Argentina is 20% to 30% overvalued, making a financial crisis inevitable, Daniel Lacalle, an economist and fund manager, told Business Insider. A financial crisis has been building in Argentina for years but was hidden by an inflationary bubble which politicians refused to address because they wanted to “avoid the pain,” said Lacalle, chief economist at Tressis SV and a fund manager at Adriza International Opportunities. “Argentina was an accident waiting to happen… Right now GDP [in Argentina] is a fabrication… a complete invention. Obviously the economy will shrink, but it shrinks to reality. It needs to face reality,” he said.

The Argentine peso has been struggling against an increasingly strong dollar. Two interest rate hikes in 24 hours failed to prevent the fall of the currency’s value and the country is seeking billions from the International Monetary Fund, according to reports. The news shocked Argentines who are still traumatized by the last IMF loan which coincided with austerity and the financial crisis in 2001 that caused social and economic chaos. The next crisis could already be underway. “The crisis is already happening. You have seen prices go through the roof, discontent, the economy is not growing as it was supposed to grow,” said Lacalle.

He added that the problems have been building for years but were disguised by a “massive bubble” which came from an “extreme inflow of cheap dollars” during the end of QE and helpful “tailwind” conditions. The tailwind has now reversed thanks to an increasingly strong dollar and the prospect of an interest rate rise from the US Federal Reserve. The result is a crisis which interest rate rises have failed to stave off. It was disguised by politicians who wanted to “avoid the pain of facing the problems, so they tried to indebt their way out of it,” Lacalle said.

Planting a spy in a political campaign may cause a problem or two.

• About That FBI ‘Source’ (Strassel)

Did the bureau engage in outright spying against the 2016 Trump campaign? The Department of Justice lost its latest battle with Congress Thursday when it allowed House Intelligence Committee members to view classified documents about a top-secret intelligence source that was part of the FBI’s investigation of the Trump campaign. Even without official confirmation of that source’s name, the news so far holds some stunning implications. Among them is that the Justice Department and Federal Bureau of Investigation outright hid critical information from a congressional investigation. In a Thursday press conference, Speaker Paul Ryan bluntly noted that Intelligence Chairman Devin Nunes’s request for details on this secret source was “wholly appropriate,” “completely within the scope” of the committee’s long-running FBI investigation, and “something that probably should have been answered a while ago.”

Translation: The department knew full well it should have turned this material over to congressional investigators last year, but instead deliberately concealed it. House investigators nonetheless sniffed out a name, and Mr. Nunes in recent weeks issued a letter and a subpoena demanding more details. Deputy Attorney General Rod Rosenstein’s response was to double down—accusing the House of “extortion” and delivering a speech in which he claimed that “declining to open the FBI’s files to review” is a constitutional “duty.” Justice asked the White House to back its stonewall. And it even began spinning that daddy of all superspook arguments—that revealing any detail about this particular asset could result in “loss of human lives.” This is desperation, and it strongly suggests that whatever is in these files is going to prove very uncomfortable to the FBI.

The bureau already has some explaining to do. Thanks to the Washington Post’s unnamed law-enforcement leakers, we know Mr. Nunes’s request deals with a “top secret intelligence source” of the FBI and CIA, who is a U.S. citizen and who was involved in the Russia collusion probe. When government agencies refer to sources, they mean people who appear to be average citizens but use their profession or contacts to spy for the agency. Ergo, we might take this to mean that the FBI secretly had a person on the payroll who used his or her non-FBI credentials to interact in some capacity with the Trump campaign. This would amount to spying, and it is hugely disconcerting.

“Trump has reshuffled the Grand Chessboard. Persians, though, happen to know a thing or two about chess.”

• The Art of Breaking a Deal (Escobar)

To cut to the chase, the US decision to leave the JCPOA will not open the path to an Iranian nuclear weapon. Supreme Leader Ayatollah Khamenei, who has the last word, repeatedly stressed these are un-Islamic. It will not open the path toward regime change. On the contrary, Iran hardliners, clerical and otherwise, are already capitalizing on their interpretation from the beginning – Washington cannot be trusted. And it will not open the path toward all-out war. It’s no secret every Pentagon war-gaming exercise against Iran turned out nightmarish. This included the fact that the Gulf Cooperation Council, or GCC, could be put out of the oil business within hours, with dire consequences for the global economy.

President Hassan Rouhani, in his cool, calm, collected response, emphasized Iran will remain committed to the JCPOA. Immediately before the announcement, he had already said: “It is possible that we will face some problems for two or three months, but we will pass through this.” Responding to Trump, Rouhani stressed: “From now on, this is an agreement between Iran and five countries … from now on the P5+1 has lost its 1… we have to wait and see how the others react. “If we come to the conclusion that with cooperation with the five countries we can keep what we wanted despite Israeli and American efforts, Barjam [the Iranian description of the JCPOA] can survive.”

Clearly, a titanic internal struggle is already underway, revolving around whether the Rouhani administration – which is actively working to diversify the economy – will be able to face the onslaught by the hard-liners. They have always characterized the JCPOA as a betrayal of Iran’s national interest. [..] So, Trump has reshuffled the Grand Chessboard. Persians, though, happen to know a thing or two about chess.

China will not turn its back on Iran. Neither will Russia.

• China Walks A Fine Line In Iran (Dorsey)

Chinese businessman Sheng Kuan Li didn’t worry about sanctions when he decided in 2010 to invest $200 million in a steel mill in Iran that started producing ingots and billet within months of the lifting of punitive measures against the Islamic republic as part of 2015 international nuclear agreement with Iran. With no operations in the United States, Mr. Li was not concerned about being targeted by the US Treasury. Mr. Li, moreover, circumvented financial restrictions on Iran by funding his investment through what he called a “private transfer,” a money swap that was based on trust and avoided regular banking channels. In doing so, Mr. Li was following standard Chinese practice of evading the sanctions regime by using alternative routes or establishing alternative institutions that were in effect immune.

To be able to continue to purchase Iranian oil while sanctions were in place, China, for example, established the Bank of Kunlun to handle Chinese payments. The Chinese experience in circumventing the earlier sanctions will come in handy with Beijing rejecting US President Donald J. Trump’s renewed effort to isolate Iran and force it to make further concessions on its nuclear and ballistic missiles programs as well as the Islamic republic’s regional role in the Middle East by walking away from the 2015 agreement and reintroducing punitive economic measures. Chinese foreign ministry spokesman Geng Shuang said in response to Mr. Trump’s announcement that the People’s Republic was committed to the deal and would “maintain communication with all parties and continue to protect and execute the agreement fully.”

How can you maintain individualism rules when you see how people interact with social media?

• Capitalism Is Collectivist (CA)

One of the central tenets of late-20th century consumer capitalism is the sanctity of the individual. Margaret Thatcher declared that “There’s no such thing as society, there are individual men and women.” Ayn Rand’s philosophy glamorized anti-social übermenschen who stand against everyone else. Friedrich von Hayek thought mild social welfare policy could be compared to Nazi fascism because they are both “collectivist.” Libertarians promote “individual freedom” with a level of brand discipline that would make Apple proud.

It’s easy to swallow this idea at face value, agreeing that market fundamentalists really do value the inviolability of the individual, while the left believes instead in the collective and the community. After all, market zealots don’t merely try to dismantle policies that benefit the common good. They attack the idea that there can be a common good to begin with. Because leftists talk about social welfare, and supporters of markets put the Individual at the center of their framework, one can forgive those who are seduced by this rhetoric. But it is only rhetoric. In fact, today’s economy is a collectivist enterprise, insofar as collectivism elevates the good of the aggregate and the organization over that of individual human beings.

Get past the well-crafted agitprop, and we see that corporate capitalism is all about subsuming the particular will of an individual to that of the institution. The institutions vary: a monopolistic corporation, a nonprofit charity, an arm of government, the police. But in each, the individual is actually helpless and powerless, with the needs, wants, and will of the larger entity taking priority. Amazon workers work for Amazon: They don’t set the rules of their own workplace, that’s done from above. They don’t own the company, they don’t get to say what it does. And Amazon in particular is a pioneer in sacrificing the sanctity (and dignity) of the individual to the company. The employees serve the corporation, rather than the other way around.

Steve on Marx’s crucial mistake.

• Karl Marx Sacrificed Logic On The Altar Of His Desire For Revolution (Keen)

With both use-value and exchange-value quantitative, there will be a difference between these two “intrinsically incommensurable magnitudes” (Capital I. Ch. 19) that is the source of surplus. Marx’s best statement of this in relation to labor was in Capital I itself: “The daily cost of maintaining it [Labour], and its daily expenditure in work, are two totally different things. The former determines the exchange-value of the labour power, the latter is its use-value. The fact that half a [working] day’s labour is necessary to keep the labourer alive during 24 hours, does not in any way prevent him from working a whole day… The seller of labour power, like the seller of any other commodity, realises its exchange value, and parts with its use-value.”

He thus had a far more satisfying, positive proof as to why Labour was a source of surplus. But was it the only source? What about machinery as well? In the Grundrisse, when he was still enthralled by his new methodology, he applied it correctly to machinery: “It also has to be postulated (which was not done above) that the use-value of the machine [is] significantly greater than its value; i.e. that its devaluation in the service of production is not proportional to its increasing effect on production.” But Gadzooks! This means that machinery can be a source of surplus as well. And if so, then an increasing “organic composition of capital” has no implications for the levels of surplus and profit: they could go up just as well as go down when production became less labour-intensive.

The “Tendency for the Rate of Profit to Fall” disappears. Socialism is no longer inevitable. Marx’s reaction to this shock discovery was to employ verbal gymnastics until such a time that he could fool himself that he had reconciled the two approaches. He then set about fooling everyone else, and finally declared emphatically—and falsely—that: “However useful a given kind of raw material, or a machine, or other means of production may be, though it may cost £150… yet it cannot, under any circumstances, add to the value of the product more than £150”. With this false statement swallowed by Marx’s followers, the belief in the inevitability of socialism continued. Accidents of history led to his Russia’s Bolshevik followers attempting to impose socialism on feudal Russia, and the rest is a very unfortunate history.

What despair looks like.

• Theresa May Turns Brexit Into Role-Reversal Game (G.)

Theresa May has ordered Brexiters to study her “customs partnership” model, and remainers to go over the leavers’ “maximum facilitation” proposal, in a bid to thrash out a compromise between the two sides. Boris Johnson and Philip Hammond – apparently regarded as the “ultras” of leave and remain, respectively – have been sitting out of the cabinet working groups. May’s “customs partnership” will be examined by Brexiters Liam Fox and Michael Gove, teamed with remainer and Cabinet Office minister David Lidington. “Max-fac” will be workshopped by remainers Greg Clark, the business secretary, and Karen Bradley, the Northern Ireland secretary, along with Brexit secretary David Davis, a leaver.

The ministers have until Tuesday to examine their options, but entrenched positions mean a breakthrough is not expected. One cabinet minister told the Guardian it is partly about May wanting to “kick any decisions down the road for as long as she can”. It certainly looks that way, after Andrea Leadsom, the leader of the Commons, announced government business for the next fortnight – minus the EU withdrawal bill, which needs to come back from the Lords but is peppered with amendments that have enraged Brexiters. Labour accused the government of “subverting democracy” with the delay.

Sir John Major, meanwhile, has hit out at Brexiters’ failure to grasp that leaving the customs union would mean a hard border in Ireland and damaging consequences for peace there. The Conservative former PM, speaking at the Irish embassy in London, said without a customs union, border checks would be required by law, especially for food, animals and animal feed. “If so, a physical border seems unavoidable,” he said.

How bubbles implode. Slowly at first.

• Third of British Homeowners Priced Out Of Their Own Property (Ind.)

More than one in three UK homeowners wouldn’t be able to afford their home if it were listed on the property market at today’s value says new research, as the latest data confirms prices stutter upwards. The Halifax House Price Index, a leading measure of the state of the property market, this week released figures showing prices in the last three months were 2.2% higher than in the same period last year, with the average property now coming in at £220,962. The figures support separate findings that suggest that a significant proportion of those who have owned their own home even for a few years would already be priced out of the market if they were to attempt the purchase again, despite historically low mortgage interest rates.

More than one in three of the 3,000 property owners surveyed by MyJobQuote said their home’s value had increased to the point that they would be unable to afford it at the current value – an average of £50,000 more than their original purchase price – or that changes to their financial circumstances would now make it impossible. However, the Halifax data suggests that a downward price trend that had been contained in geographical pockets until recently is becoming more widespread. While the annual figures still show a reasonable increase, month by month, prices are currently dropping nationally by an average of more than 3%. At a time when the property market traditionally enters a stronger summer buying season, the latest data, which follows a 1.6% increase in average prices in March, suggests a rocky state of affairs.

Properties become unused and useless. There is no reason for this to happen. Scorched Earth.

• Greece Sees Spike In Waivers Of Inheritance (K.)

The exhaustion of Greeks’ taxpaying capacity and the difficulties in meeting day-to-day expenses are leading to more and more citizens waiving inheritances, especially when they concern real estate assets. Legal sources say that the phenomenon no longer only concerns people waiving inheritances due to the debts of the deceased (which they would have to pay), but has spread to those wishing to avoid the payment of the inheritance tax and the Single Property Tax (ENFIA), as well as expenses related to property maintenance. According to the latest data available, in 2017 such waivers amounted to 130,000, while the definitive data will be issued soon, according to Justice Ministry sources.

That figure is quite impressive, given that it is almost three times the number of inheritance waivers in 2016 (54,422), and is up by 333 percent on the 2013 figure. This means that the state takes ownership of properties that cannot be utilized, as the fate of those assets remains unknown given that the state’s auction programs are fairly limited. For instance, in the first half of this month, the state will auction just three properties, after 15 assets went under the hammer over the previous fortnight but without any success. It also remains unknown how many assets have come under state ownership as a result of confiscations and property concessions.

What is certain is that all these properties are assets that will drop in value, which will make it even more difficult to find buyers for them in the future. Every beneficiary has the right to waive an inheritance, except for the state. The deadline for waiving an inheritance is four months after the day a will is published. If there is no will, the four-month period starts on the day the person dies. However, if the deceased lived abroad or the heir has their main residence in another country, then the deadline for waiving an inheritance extends to 12 months. The acceptance or waiver has to concern the entire inheritance, not parts of it.

“..the universe is getting bigger quicker than it should be..”

• The Answer To Life, The Universe And Everything Might Be 73. Or 67 (G.)

A crisis of cosmic proportions is brewing: the universe is expanding 9% faster than it ought to be and scientists are not sure why. The latest, most precise, estimate of the universe’s current rate of expansion – a value known as the Hubble constant – comes from , which is conducting the most detailed ever three-dimensional survey of the Milky Way. The data has allowed the rate of expansion to be pinned down to a supposed accuracy of a couple of percent. However, this newest estimate stands in stark contradiction with an independent measure of the Hubble constant based on observations of ancient light that was released shortly after the Big Bang. In short, the universe is getting bigger quicker than it should be.

The mismatch is significant and problematic because the Hubble constant is widely regarded as the most fundamental number in cosmology. “The fact the universe is expanding is really one of the most powerful ways we have to determine the composition of the universe, the age of the universe and the fate of the universe,” said Professor Adam Riess, at the Space Telescope Science Institute in Baltimore, Maryland, who led the latest analysis. “The Hubble constant quantifies all that into one number.” In an expanding universe, the further away a star or galaxy is, the quicker it is receding. Hubble’s constant – proposed by Edwin Hubble in the 1920s – reveals by how much.

So one approach to measuring it is by observing the redshifts of bright supernovae, whose light is stretched as the very space it is travelling through expands. A challenge, though, is pinpointing the exact distance of these stars. [..] The new data puts the Hubble constant at 73, which translates to galaxies moving away from us 73km per second faster for each additional megaparsec of distance between us and them (a megaparsec is about 3.3m light-years). However, a separate estimate of Hubble comes from observations of the Cosmic Microwave Background, relic radiation that allows scientists to calculate how quickly the universe was expanding 300,000 years after the big bang.

“The cosmic microwave background is the light that is the furthest away from us that we can see,” said Riess. “It’s been travelling for 13.7bn years… and it’s telling us how fast the universe was expanding when the universe was a baby.” Scientists then use the cosmic equivalent of a child growth chart (a computational model that roughly describes the age and contents of the universe and the laws of physics) to predict how fast the universe should be expanding today. This gives a Hubble value of 67.

Mass extinction and mass insanity.

• Palm Oil Producers Are Wiping Out Orangutans (G.)

These extraordinary creatures are our closest relatives, sharing 97% of our DNA. Their similarity to us is astonishing. They are intelligent, inquisitive, smile and show empathy. They even laugh when tickled, like us, when most other animals have evolved to be ticklish only in an itchy, irritating sort of way as a protective reflex. Encountering orangutans in the wild is like nothing else I’ve experienced. They once thrived in Indonesia’s lush, green rainforests but over the last 50 years they have been forced from their home and killed. In the last 16 years alone, 100,000 Bornean orangutans have been lost. All three species – Bornean, Sumatran and the Tapanuli, a species discovered only last year – are now on the critically endangered list.

The reason? It started in the 1960s as forests were logged for timber, but now it’s palm oil. Global demand for palm oil has increased six-fold since 1990. It’s in half of all packaged products on supermarket shelves and to avoid it completely would be incredibly tricky. Although palm oil in food can no longer be described simply as vegetable oil and must be clearly labelled (thanks to an EU directive in 2014), there is no such law for products such as soap, shampoo and other cosmetics. The supermarket Iceland’s decision to ditch palm oil from all of its own-brand products was, it says, a response to the palm oil industry’s catastrophic failure to halt deforestation and deal with the problem.

Even the Roundtable on Sustainable Palm Oil (RSPO) – the industry body charged with ensuring registered companies trade only in oil that has not come from deforestation – is failing spectacularly. Just over a week ago, Greenpeace exposed massive rainforest destruction in Papua allegedly caused by palm oil companies that are subsidiaries of a current RSPO member. Buying from them were big multinationals including Unilever, Nestlé, Pepsico and Mars. The companies concerned have responded by saying they are taking Greenpeace’s claims seriously and taking appropriate action. But if Greenpeace’s assertions are correct, no company can claim the palm oil it uses is 100% “sustainable”.

Debt Rattle May 9 2018

May 092018

May 9, 2018 Posted by Raúl Ilargi Meijer at 9:10 am Finance Tagged with: Airbus, Argentina, debt slaves, Greece, IMF, Iran, marijuana, palm oil, Pompeo, rainforest, retail, Single Market, Trump 5 Responses »

Edgar Degas Two laundresses 1876

• Fed Chair Powell To Emerging Markets: You Are On Your Own (ZH)

• Argentina Seeks IMF Aid ‘To Avoid Crisis’ (BBC)

• Europe On Collision Course With US Over Iran Deal (AFP)

• Mnuchin: Revoking Boeing, Airbus Licenses To Sell Jets To Iran (R.)

• Pompeo, In North Korea, To Return With Detained Americans (R.)

• Central Banks Rigged The Cost Of Money And The State Of The Markets (Prins)

• US Student Debt Just Hit $1.5 Trillion (MW)

• The State of the American Debt Slaves, Q1 2018 (WS)

• UK PM May Suffers Upper House Defeat Over Plans To Leave EU Single Market (R.)

• UK Retailers Suffer Sharpest Sales Drop For 22 Years In April (G.)

• Sharp Drop In UK Retail Job Vacancies As High Street Crisis Deepens (Ind.)

• Cynthia Nixon: Marijuana Industry Could Be ‘A Form Of Reparations’ (Hill)

• Record Drop In Greek Savings Last Year (K.)

• Debt Repayment Feasible if Greece ‘Implements Reforms’ – Regling (AMNA)

• British Diplomats: Saving The Rainforest Could Hurt Fighter Jet Sales (UE)

As the dollar keeps rising.

• Fed Chair Powell To Emerging Markets: You Are On Your Own (ZH)

Over the weekend, when commenting on the ongoing rout in emerging markets, Bloomberg published an article titled “Rattled Emerging Markets Say: It’s Over to You, Central Bankers.” Well, overnight the most important central banker of all, Fed Chair Jay Powell responded to these pleas to “do something”, and it wasn’t what EMs – or those used to being bailed out by the Fed – wanted to hear. As Powell explained, speaking at a conference sponsored by the IMF and Swiss National Bank in Zurich, the Fed’s gradual push towards higher interest rates shouldn’t be blamed for any roiling of emerging market economies – which are well placed to navigate the tightening of U.S. monetary policy. In other words, with the Fed’s monetary policy painfully transparent, Powell’s message to EM’s was simple: “you’re on your own.”

Arguing that the Fed’s decision-making isn’t the major determinant of flows of capital into developing economies (which, of course, it is especially as the Fed gradually reverses the biggest monetary experiment in history) Powell said the influence of the Fed on global financial conditions should not be overstated, despite Bernanke taking the blame five years ago for the so-called taper tantrum. “There is good reason to think that the normalization of monetary policy in advanced economies should continue to prove manageable for EMEs,” Powell said, adding that “markets should not be surprised by our actions if the economy evolves in line with expectations.”

[..] Meanwhile, as the Fed refuses to change course, other policy makers have been forced to step in to counter the sharp, sudden capital outflows, with Argentina’s central bank abruptly raising rates three times, to 40% to halt a sell-off in the peso. Russia has also put the brakes on further monetary easing. Turkey, which is a unique basket case in that Erdogan is expressly prohibiting the central bank from doing the one thing it should to ease the ongoing panic, i.e., raise rates, is seeking to bring down its current account deficit. Overnight, we learned that Indonesia was burning reserves to prop up its currency.

Meanwhile, also overnight, JPM CEO Jamie Dimon said it’s possible U.S. growth and inflation prove fast enough to prompt the Fed to raise interest rates more than many anticipate, and it would be wise to prepare for benchmark yields to climb to 4%. Such a scenario would be a disaster for EMs: “A sustained move higher would pressure local currencies and lure away foreign investors. The IMF warned last month that risks to global financial stability have increased over the past six months.” “Central banks may have to respond with interest rate hikes if the sell-off intensifies,” said Chua Hak Bin, a senior economist at Maybank Kim Eng Research in Singapore. Those most vulnerable include Ukraine, China, Argentina, South Africa and Turkey according to the Institute for International Finance.

IMF demand: austerity. Back to the hoovervilles.

• Argentina Seeks IMF Aid ‘To Avoid Crisis’ (BBC)

Argentina is to start talks about a financing deal with the International Monetary Fund (IMF) on Wednesday amid reports it is seeking $30bn (£22bn). Finance minister Nicolas Dujovne is due to fly to the IMF’s Washington offices. After recent turmoil that saw interest rates hit 40%, President Mauricio Macri said IMF aid would “strengthen growth” and help avoid crises of the past. The talks come 17 years after Argentina defaulted on its debts and 12 years since it severed ties with IMF. Mr Macri said in an address to the nation on Tuesday: “Just a few minutes ago I spoke with (IMF) director Christine Lagarde, and she confirmed we would start working on an agreement.”

“This will allow us to strengthen our program of growth and development, giving us greater support to face this new global scenario and avoid crises like the ones we have had in our history,” he said. Local media and Bloomberg reported that Argentina was seeking $30bn, although the government declined to comment. The peso has lost a quarter of its value in the past year amid President Macri’s pro-market reforms. Last week the central bank raised interest rates from 33.25% to 40%. Many people still blame IMF austerity requirements for policies that led to a financial and economic meltdown in 2001 to 2002 that left millions of middle class Argentines in poverty. Argentina eventually defaulted on its debts. And although its last IMF loan was paid down in 2006, the country severed ties with the Washington-based body.

“US sanctions will target critical sectors of Iran’s economy. German companies doing business in Iran should wind down operations immediately,” tweeted the US ambassador in Berlin, Richard Grenell.

• Europe On Collision Course With US Over Iran Deal (AFP)

Donald Trump’s decision to pull out of the landmark 2015 deal curbing Iran’s nuclear programme is a bitter pill to swallow for European leaders and risks a creating a major transatlantic rift. French President Emmanuel Macron, who has spent the past year cultivating the closest ties with Trump among EU leaders, made saving the Iran deal one of his priorities during his state visit to Washington last month. German Chancellor Angela Merkel had also travelled to the US in late April and she worked closely with Macron and British Prime Minister Theresa May right up to the last minute.

In a joint statement issued shortly after Trump walked away from 2015 accord, they said they noted the decision with “regret and concern” but they said they would continue to uphold their commitments. “Our governments remain committed to ensuring the agreement is upheld, and will work with all the remaining parties to the deal to ensure this remains the case,” they said. They noted that this included the “economic benefits to the Iranian people that are linked to the agreement,” which means European firms would in theory continue to invest and operate there. This would appear to set the three countries, all signatories along with Russia, China and the EU, on a direct collision course with Washington.

European leaders have clashed with the White House already on issues ranging from climate change to trade and Trump’s decision to move the US embassy in Israel to Jerusalem. Trump’s hawkish National Security Advisor John Bolton said that European firms would have a “wind down” period to cancel any investments made in Iran under the terms of the accord. “US sanctions will target critical sectors of Iran’s economy. German companies doing business in Iran should wind down operations immediately,” tweeted the US ambassador in Berlin, Richard Grenell. Under the 2015 deal, Iran was meant to benefit from increased trade and contracts with foreign firms in exchange for accepting curbs on its nuclear activity and stringent monitoring.

Airbus? But it’s European. Oh: “All the deals are dependent on U.S. licenses because of the heavy use of American parts in commercial planes.”

• Mnuchin: Revoking Boeing, Airbus Licenses To Sell Jets To Iran (R.)

Licenses for Boeing Co and Airbus to sell passenger jets to Iran will be revoked, U.S. Treasury Secretary Steven Mnuchin said on Tuesday after President Donald Trump pulled the United States out of the 2015 Iran nuclear agreement. Trump said he would reimpose U.S. economic sanctions on Iran, which were lifted under the agreement he had harshly criticized. The pact, worked out by the United States, five other world powers and Iran, lifted sanctions in exchange for Tehran limiting its nuclear program. It was designed to prevent Iran from obtaining a nuclear bomb. IranAir had ordered 200 passenger aircraft – 100 from Airbus SE, 80 from Boeing and 20 from Franco-Italian turboprop maker ATR.

All the deals are dependent on U.S. licenses because of the heavy use of American parts in commercial planes. Boeing agreed in December 2016 to sell 80 aircraft, worth $17 billion at list prices, to IranAir under an agreement between Tehran and major world powers to reopen trade in exchange for curbs on Iran’s nuclear activities. The U.S. Treasury Department, which controls licensing of exports, said the United States would no longer allow the export of commercial passenger aircraft, parts and services to Iran after a 90-day period. “The Boeing and (Airbus) licenses will be revoked,” Mnuchin told reporters at the Treasury. “Under the original deal, there were waivers for commercial aircraft, parts and services and the existing licenses will be revoked.”

Are they going to say they were well treated?

• Pompeo, In North Korea, To Return With Detained Americans (R.)

U.S. Secretary of State Mike Pompeo is expected to return from North Korea with three American detainees, as well as details of an upcoming summit between leader Kim Jong Un and U.S. President Donald Trump, a South Korean official said on Wednesday. Pompeo arrived in Pyongyang on Wednesday from Japan and headed to the Koryo Hotel in the North Korean capital for meetings, a U.S. media pool report said. Trump earlier broke the news of Pompeo’s second visit to North Korea in less than six weeks and said the two countries had agreed on a date and location for the summit, although he stopped short of providing details. An official at South Korea’s presidential Blue House said Pompeo was expected to finalize the date of the summit and secure the release of the three American detainees.

While Trump said it would be a “great thing” if the American detainees were freed, Pompeo told reporters en route to Pyongyang he had not received such a commitment but hoped North Korea would “do the right thing”. “We’ll talk about it again today,” he said. “I think it’d be a great gesture if they would choose to do so.” The pending U.S.-North Korea summit has sparked a flurry of diplomacy, with Japan, South Korea and China holding a high-level meeting on Wednesday. Chinese Premier Li Keqiang said concerned parties should seize the opportunity to promote denuclearization of the Korean peninsula, the official Xinhua news agency reported.

More Nomi.

• Central Banks Rigged The Cost Of Money And The State Of The Markets (Prins)

Nomi Prins: The word “collusion” has come to be associated with Russia, Trump and the US election. My book is about something entirely different, much more global: the collusion (or coordination) that the US central bank (the Federal Reserve) forged with other major countries to fabricate an abundance of money in the wake of the 2008 financial crisis to support the US financial system at first, and banks and select companies and markets worldwide, as well, since. The Fed conjured up this money to provide liquidity for Wall Street banks. The policy was then exported to the major central banks who acted as a lender and supplier of last resort to the world.

Some of the most notable central banks include the European Central Bank (ECB), the Bank of Japan and the Bank of England. Collusion is about these powerful institutions’ relationships with each other. The book dives into how central banks rigged the cost of money and the state of the markets, and ultimately created more inequality and instability as a result. They did all of this in order to subsidize private banks at the expense of people everywhere. The book reveals the people in charge of these strategies, their elite gatherings and public and private communications. It uncovers how their policies rerouted economies, geopolitics, trade wars and elections.

How do central banks relate to the world’s markets? Central banks have several functions from an official standpoint. The first is to regulate the smooth and orderly operation of private banks or public banks within a particular country or region (the ECB is responsible for many countries in Europe). The other function they are tasked with is setting interest rates (the cost of borrowing money) so that there’s adequate economic balance between full employment and a select inflation rate. The idea is that if the cost of money is cheap enough, private banks will lend to the general population and businesses. The ultimate goal is that the money can be used to expand enterprise, hire people and develop a strong economic posture.

What cannot be repaid will not be.

• US Student Debt Just Hit $1.5 Trillion (MW)

America’s student loan problem just surpassed a depressing milestone. Outstanding student debt reached $1.521 trillion in the first quarter of 2018, according to the Federal Reserve, hitting $1.5 trillion for the first time. Though the marker is somewhat arbitrary, it offers a reminder of how quickly student debt has grown—jumping from about $600 billion 10 years ago to more than $1.5 trillion today—and that the factors fueling the increase aren’t likely to disappear any time soon. “People pay attention to milestones,” said Mark Kantrowitz, a financial aid expert. When student debt surpassed $1 trillion in 2012, “it definitely caused a shift in coverage of student loans in the news media,” he said.

In theory, that helps raise awareness of the issue for student advocates, lawmakers and, in particular, borrowers when considering what college to attend. But Kantrowitz added, “What’s more important is the impact on individual borrowers.” And they are feeling it. College graduates leave school with about $37,000 in debt on average, according to Kantrowitz’s data, a sum that can be bearable for many, given that the average starting salary for a new college graduate last year hovered around $50,000. But a large share—as many as one in six college graduates, Kantrowitz estimates—will leave school with debt that exceeds their income. That will make it challenging for those borrowers to pay off their loans on a standard 10-year repayment plan, he said.

Now let’s throw in some rate hikes, see what happens.

• The State of the American Debt Slaves, Q1 2018 (WS)

Total consumer credit rose 5.1% in the first quarter, compared to a year earlier, or by $184 billion, to $3.824 trillion (not seasonally adjusted), according to the Federal Reserve. This includes credit-card debt, auto loans, and student loans, but not mortgage-related debt. That 5.1% year-over-year increase isn’t setting any records – in 2011, year-over-year increases ran over 11%. But it does show that Americans are dealing with the economy and their joys and woes the American way: by piling on debt faster than the overall economy is growing. The chart below shows the progression of consumer debt since 2006. In line with seasonal patterns for first quarters, consumer credit (not seasonally adjusted) edged down from Q4, as the spending binge of the holiday shopping season turned into hangover, an annual American ritual:

Note how the dip after the Financial Crisis – when consumers deleveraged mostly by defaulting on those debts – didn’t last long. Over the 10 years since Q1 2008, consumer debt has now surged 47%. Over the same period, the consumer price index has increased 16.9%: Auto loans and leases for new and used vehicles rose by 3.8% from a year ago, or by $41 billion, to $1.118 trillion. It was one of the smaller increases since the Great Recession: The peak year-over-year jumps occurred at the peak of the new vehicle sales boom in the US in Q3 2015 ($87 billion or 9%). However, the still standing records were set in Q1 and Q2 2001 near the end of the recession, with each quarter adding around $93 billion, or 16%, year-over-year.

It really makes no difference; the EU will say no anyway to all plans acceptable to the UK.

• UK PM May Suffers Upper House Defeat Over Plans To Leave EU Single Market (R.)

Britain’s upper house of parliament on Tuesday inflicted another embarrassing defeat on Prime Minister Theresa May’s government on Tuesday, challenging her plan to leave the European Union’s single market after Brexit. May, who has struggled to unite the government behind her vision of Brexit, has said Britain will also leave the European Union’s single market and customs union after it quits the bloc next March. That stance has widened divisions not only within her own Conservative Party but also across both houses of parliament, which like Britons at large, remain deeply split over the best way to leave the EU after more than four decades of membership.

By a vote of 245 to 218, the unelected upper chamber, the House of Lords, supported an amendment to her Brexit blueprint, the EU withdrawal bill, requiring ministers to negotiate continued membership of the European Economic Area, meaning that it would remain in the single market. “The time has come over Brexit, really, for economic reality and common sense to prevail over political dogma and wishful thinking,” said Peter Mandelson, a member of the House of Lords from the main opposition Labour Party, who backed the amendment.

His comments drew criticism from pro-Brexit peers, including Conservative member Michael Forsyth who described the amendment as part of an attempt by “a number of people in this house who wish to reverse the decision of the British people”. Those proposing the amendment deny the charge. This is the 13th time in recent weeks that the government has been defeated in the House of Lords on the draft legislation that will formally terminate Britain’s EU membership.

Must have been the weather.

• UK Retailers Suffer Sharpest Sales Drop For 22 Years In April (G.)

Britain’s retailers suffered the sharpest drop in business in more than two decades last month as bad weather, the squeeze on household budgets and the timing of Easter led to a hefty cut in consumer spending. In the latest evidence of the slowdown in the economy since the turn of the year, the latest health check from the British Retail Consortium (BRC) and KPMG found that sales were down by 3.1% in April, the biggest decline since the survey was launched in 1995. Spending on non-food items has been particularly hard hit over the last three months, and retailers are braced for tough trading conditions to continue for the rest of the year even though wages have now started to rise more quickly than prices.

Retailers have been hit hard by a combination of problems on top of the squeeze on spending, including higher labour costs as a result of increases in the minimum wage, the shift to online shopping and rapidly changing spending patterns. Toys R Us and the electricals retailer Maplin collapsed in February and a number of retailers, including House of Fraser, New Look, Carpetright and Poundworld, are all pursuing agreements with their landlords to cut their rents and close stores. The industry had been expecting that year-on-year comparisons would look poor for April, but the BRC’s chief executive, Helen Dickinson, said the problem ran deeper.

Pickers and packers.

• Sharp Drop In UK Retail Job Vacancies As High Street Crisis Deepens (Ind.)

Wages rose in April amid strong demand for candidates, but the number of retail vacancies dropped sharply as the crisis on the high street worsened, a recruitment industry survey has found. Growth of overall job vacancies picked up to a three-month high in April, the Recruitment and Employment Confederation said. Demand for permanent staff increased in the “vast majority” of job categories during the month, with the notable exception of retail, the REC said. The study of 400 recruitment consultancies found that engineering and IT saw the steepest increases in vacancies. REC director of policy Tom Hadley said the high-profile struggles of many retailers indicated it was a good time for staff to consider how they could transfer their skills into other roles, such as in the technology sector or as pickers and packers in distribution centres. “Helping people make career transitions will become increasingly important in this fast-changing business and employment landscape,” he said.

Smart.

“..In New York in 2017, 86% of fifth-degree marijuana arrests were of people of color, while only 9% of those arrested were white..”

• Cynthia Nixon: Marijuana Industry Could Be ‘A Form Of Reparations’ (Hill)

New York gubernatorial candidate and actress Cynthia Nixon on Saturday expanded on her calls for marijuana legalization, saying that the industry could provide a form of “reparations” for communities of color. Nixon, who expressed her support for legalizing marijuana earlier this year, told Forbes that she views marijuana as a racial justice issue. “We’re incarcerating people of color in such staggering numbers,” she said. She expressed support for what is known as an “equity” program, which would prioritize giving marijuana business licenses to people who have received marijuana convictions in the past. “Now that cannabis is exploding as an industry, we have to make sure that those communities that have been harmed and devastated by marijuana arrests get the first shot at this industry,” she told Forbes.

“We [must] prioritize them in terms of licenses. It’s a form of reparations.” In New York in 2017, 86% of fifth-degree marijuana arrests were of people of color, while only 9% of those arrested were white, despite data showing that black and white people are about equally likely to use marijuana. “Arresting people — particularly people of color — for cannabis is the crown jewel in the racist war on drugs and we must pluck it down,” she said. “We must expunge people’s records; we must get people out of prison.” “The use of marijuana has been effectively legal for white people for a really long time,” she told Forbes. “It’s time that we legalize it for everybody else.”

Everything keeps going down. It’s guaranteed.

• Record Drop In Greek Savings Last Year (K.)

Household savings shrank by 32.5 billion euros in total in the period from 2011 to 2017, as families increasingly resorted to dipping into their deposits after finding that disposable incomes are no longer enough to cover their outgoings. Last year the drop in savings reached an historic high of 8.3 billion euros in current prices, according to an analysis by Eurobank. In addition, households have resorted to liquidating assets such as properties, deposits, shares and bonds, among other investments. Notably consumption shrank by almost a quarter from 2008 to 2017, falling from 163.3 billion euros to 123.3 billion last year, which was the sixth in a row with negative savings for Greek households; this means that disposable income was less than consumption.

Eurobank data showed that the wealth of the country’s households has been in constant decline since 2011, falling at an average rate of 6.6 billion euros per year, which is transformed from various forms of savings into consumption. The report by Eurobank’s analysis department highlighted that the economic recession, the stagnation in investments and the major fiscal adjustment Greece experienced from 2009 to 2017 have compressed households’ saving capacity, both in terms of incomes and their obligations to the state through taxes and social security contributions.

The figures reveal that Greek households’ net annual savings amounted to 11.4 billion euros in 2009, or 7% of their gross disposable income, while last year the balance was negative by 8.3 billion, or 6.7% of households’ gross disposable income. Shrinking private consumption has had a direct impact on investments: In 2009 investments had amounted to 18.3% of GDP and were 31.8% funded by domestic consumption and the rest from borrowing. In 2017 the investment rate slipped to 11.6% of GDP, with domestic consumption accounting for 91.1%.

Delusional or lying to our faces?

• Debt Repayment Feasible if Greece ‘Implements Reforms’ – Regling (AMNA)

“If the government in Athens implements all the remaining reforms decisively, Greece can successfully emerge from the ESM program in August 2018,” Klaus Regling, president of the European Stability Mechanism, has said. The ESM chief spoke at en event held in Aachen, Germany on the occasion of the awarding of the 60th International Charlemagne Prize to French President Emmanuel Macron. Regling expressed confidence that Greece could repay its loans, provided the maturity times are sufficiently extended and the obligations do not exceed 15-20% of the country’s economic performance. The ESM chief said that if the latest report on Greece’s bailout program is positive, there will be a final disbursement from the ESM, and then decisions will be made on possible further debt relief.

He argued that there was absolutely no alternative to the establishment of the rescue mechanism, without which, as he said, Greece, Portugal and Ireland would have probably come out of Economic and Monetary Union under “chaotic conditions,” while at the same time other countries such as Germany, would have problems. Regling also stressed that ESM interest rates are clearly below the level that countries would have to pay in the markets, and that is why they save a lot of money. In the case of Greece, “we estimate that ESM loans lead to savings of almost €10 billion [$11.8 billion] each year for the Greek budget”, he said and stressed that this is happening costing nothing to the European taxpayer.

“These savings are an expression of the solidarity shown by the member states of the euro zone,” he said, and referred to “great efforts” that Greece is making to fulfill the strict reform conditions. “Overall, Greece now has impressive adaptation efforts behind it. The budget deficit at the start of the 2009 crisis was above 15% of GDP. For two years, the country has been generating a budget surplus. Such a success is only possible with profound reforms,” Regling noted and said that if Greece implements all reforms, eurozone finance ministers would give Greece further debt relief, namely longer repayment times.

Finally, explaining the reasons why Greece remains in a program while the other countries have completed their own, referred to the country as a “special case” for three reasons: “Firstly, the Greek economy has had problems that are deeper rooted than for other countries in a program. Secondly, the country suffered from a much weaker public administration than the other eurozone member states. “And thirdly, the Greek government in the first half of 2015 went in the wrong direction with then finance minister (Yanis Varoufakis): major reforms were revoked and an effort was made to stop the agreed reform program. “As a result, the Greek economy had fallen into a recession. Grexit suddenly became a realistic scenario. The Bank of Greece estimates that this wrong move cost Greece €86 billion.”

How we think.

• British Diplomats: Saving The Rainforest Could Hurt Fighter Jet Sales (UE)

British government officials warned a proposed EU ban on palm oil in biofuels could harm UK defence sales to Malaysia, specifically Typhoon fighter jets, according to government emails obtained by Unearthed. The correspondence reveals that the British high commission in Kuala Lumpur even expected Malaysian Prime Minister Najib Razak to lobby Theresa May personally on the issue at last month’s Commonwealth Heads of Government meeting. In the event, Razak did not attend the meeting in London, a Number 10 spokeswoman told Unearthed. Correspondence between the Ministry of Defence, the Department for Environment, Food and Rural Affairs and the British high commission reveals British officials were concerned that EU moves to ban palm oil in biofuels could result in Malaysian trade reprisals against the UK.

MEPs voted in January to phase out the use of palm oil in biofuels, citing environmental concerns. The move sparked a furious response from the governments of Indonesia and Malaysia, which produce most of the world’s palm oil. The debate over palm oil is playing a significant role in the run-up to Malaysia’s general election, which will be held tomorrow. On the morning of 5 February, an official at the British high commission in Malaysia sent an email warning that the EU decision was “a big issue for Malaysia and, if not handled correctly, has the potential to impact on bilateral trade, particularly defence sales (Typhoon)”.

Debt Rattle November 30 2016

Nov 302016

November 30, 2016 Posted by Raúl Ilargi Meijer at 11:06 am Finance Tagged with: bubble, empires, Fed, jobs, palm oil, RBS, refugees, Snowden, Trump, Turkey, USD 6 Responses »

Wyland Stanley Bulletin press car: Mitchell auto at Yosemite National Park 1920

• OK, I get it: Companies Clamor for Cheap Labor, Fed Delivers (WS)

• Trump Notches a Win as Carrier Agrees to Keep 1,000 Jobs in U.S.

• Asia Is About to Face a Significant Dollar Stress Test (BBG)

• Property Bubble ‘Most Important Macro Issue In China’ – Deutsche (BI)

• China’s Foreign Investment ‘Shopping Spree’ Over?! (SCMP)

• RBS Fails Bank Of England Stress Test (Ind.)

• UK Shoppers ‘Resolutely Gloomy’ About The Future Of The Economy (Ind.)

• The ‘Washington Post’ ‘Blacklist’ Story Is Shameful and Disgusting (Taibbi)

• US Intelligence Experts Urge Obama To End Snowden’s ‘Untenable Exile’ (G.)

• The End Of Empires: Rome Vs. America (SHTFP)

• The Rediscovery of Men (Jim Kunstler)

• Major Global Firms Buy Indonesia Palm Oil Produced By Child Labor (R.)

• North Dakota Moves To Block Supplies From Reaching Pipeline Protesters (R.)

• The Areas America Could Abandon First (BBG)

• Turkey Has Secret Plan To Send 3,000 Refugees To Greece Every Day (Ind.)

Makes it easier to bring jobs back home, too.

• OK, I get it: Companies Clamor for Cheap Labor, Fed Delivers (WS)

Despite all the frothy excitement about the stock market’s new highs, and the drooling today over the new highs reached by Housing Bubble 2, exceeding the prior crazy highs of Housing Bubble 1 even according to the Case-Shiller Index, and despite eight years of super-low interest rates, and a million other things that are hyped constantly, median household incomes, the crux of the real economy, is still a dreary affair. Sentier Research released its median household income measure for October today. Adjusted for inflation, it edged up 0.6% from a year ago to $57,929. But it’s down 1.3% from January 2008, and it’s down 1.5% from its peak in 2002. It has fallen 0.5% since January. That’s not a propitious trend. The report put it this way: “Median annual household income in 2016 has not been able to maintain the momentum that it achieved during 2015.” This chart by Doug Short shows the stagnating inflation-adjusted debacle (blue line) and the nominal income (red line):

[..] Even minuscule but consistent understatement of CPI in relationship to actual price changes as experienced by the median household wreaks havoc on their inflation-adjusted income. Since 2000, official inflation has amounted to 42%. If CPI is understated by just a fraction every year, multiplied by 16 years, it would knock several%age points off real median household income. This translates into reduced purchasing power, which is exactly what many people have been experiencing. This whole affair – the devious impact of inflation on household income – becomes even clearer in this chart by Doug Short at Advisor Perspectives. It shows the% change over time, starting in 2000: The beautifully soaring illusion of nominal income (red line), and the dreary reality of wage stagnation or worse, after inflation (blue line):

Not even a rounding error, but it gets more headlines than jobs are saved.

• Trump Notches a Win as Carrier Agrees to Keep 1,000 Jobs in U.S.

Carrier agreed to keep about 1,000 jobs at an Indiana factory that had been set to move to Mexico, marking a victory for President-elect Donald Trump on an issue that had become a rallying cry during his campaign. “We are pleased to have reached a deal” with Trump and Vice President-elect Mike Pence to keep the work in the U.S., Carrier said Tuesday in a tweet. Trump tweeted that he’ll travel to Indiana on Thursday to make the announcement. Carrier said earlier this year it would move the furnace plant’s operations, eliminating 1,400 U.S. jobs, to keep production costs competitive.

The decision garnered national notice after a worker’s cell-phone video of the announcement to employees took off on social media and generated criticism of Carrier parent United Technologies, which is also a major defense contractor that supplies engines for U.S. fighter jets. Trump, as well as Democratic U.S. Senator Bernie Sanders, seized on the announcement and used the company in their presidential campaigns as an example of how U.S. workers were being hurt by trade deals. In April, Trump said he would impose a hefty tax on Carrier’s Mexican-made products and “within 24 hours, they’re going to call back: ‘Mr. President, we’ve decided to stay. We’re coming back to Indianapolis.’”

When the reserve currency stops flowing, beware.

• Asia Is About to Face a Significant Dollar Stress Test (BBG)

For Asian markets, 2017 could be the year of the dollar crunch. Foreign portfolio flows have taken a sharp downturn since Donald Trump’s election victory, with $15 billion fleeing Asian bonds and stocks this month alone — close to 30% of year-to-date inflows to the region, according to Deutsche Bank — as a strengthening greenback and a bevy of protectionist policies from the president-elect darken the growth prospects for emerging markets. Lending spreads, domestic demand and the resolve of domestic central banks to offset liquidity shortages will be tested next year, analysts warn, as key sources of dollar flows to the region trade and portfolio inflows may unravel if Trump makes good on his key campaign proposals.

A slew of investment banks this week, including Deutsche Bank, Citigroup, Morgan Stanley and Societe Generale, reckon the pain for emerging markets will intensify in 2017, citing, in part, the rising cost of servicing dollar debts amid a strengthening greenback relative to local currencies, and higher Fed policy rates. “The [debt-servicing] challenge looks even fiercer for non-US borrowers who have borrowed in dollars — dollar strength will make it harder to repay the debt,” SocGen analysts, led by Brigitte Richard-Hidden, wrote in a report on Tuesday. “There are plenty of them, as the outstanding dollar-denominated credit to the rest of the world has more than doubled over the past 10 years to nearly $10 trillion,” analysts at the French bank conclude. “EM countries and corporations in particular have been keen on borrowing in dollars ([to the tune of] $3.2 trillion).”

At the heart of the challenge, according to analysts: a tighter U.S. trade position with the region in the coming years, which would shrink the pool of dollars floating overseas and make it harder for emerging markets to settle cross-border trade and service hard-currency debts. “Each of these sources of dollars – whether from trade, portfolio flows or debt issuance – could be at risk in the new post-election regime,” Deutsche Bank strategists, led by Mallika Sachdeva, wrote in a research note on Monday. “This could mean a reduction in trade surpluses in the region: exports could suffer from protectionist efforts.”

Much of the world is a Chinese property bubble, especially major cities.

• Property Bubble ‘Most Important Macro Issue In China’ – Deutsche (BI)

China’s debt-fuelled property boom, and potential bust, will be one of the biggest issues facing the country’s policymakers in 2017, according to Deutsche Bank. Deutsche Bank economists, led by Zhiwei Zhang and Li Zeng, said the real estate bubble is “the most important macro issue in China,” in a note to clients. They point to rapid hikes in land sales and auction prices, as well as mounting debt levels, as needing attention. Land sales accounted for more than a third of local government revenue, Deutsche Bank said, and mortgages made up 43% of all new loans issued in renminbi. The difference between the starting price and final price in land auctions continues to rise rapidly and “this shows some developers continue to expect sharp property price inflation to come,” the analysts said. Here’s the chart:

And here’s the debt chart showing sharp increases for this year:

“Chinese policymakers are aware the market risks overheating and will act accordingly.” “In the next few months we believe the government will put further pressure on developers by tightening broad credit growth,” Zhang and Zeng said. “Property sales and investment growth will likely slow further in 2017Q1. Local government land revenue may weaken by 2017Q2.” On Monday analysts at Morgan Stanley raised the alarm about increased household borrowing, led by mortgages, in a note to clients. China’s debt to GDP rose to 276% in the third quarter this year from 249% in 2015. “This has been mainly driven by a rapid rise in new mortgages from RMB 1.7 trillion in 2014 to RMB 4.6 trillion in the past 12 months,” according to a note circulated to clients. With the debt overhang growing, the economic benefits of borrowing more are shrinking. It took nearly eight units of debt to produce one unit of GDP growth in 2016, compared with around four in 2014.

Want to bet?

• China’s Foreign Investment ‘Shopping Spree’ Over?! (SCMP)

The central government is embarking on a massive policy shift designed stem capital outflow by curbing mainland China’s outbound investment, sources informed of official instructions have told the South China Morning Post. Tighter control of outbound investment is likely to put an end to a trophy asset shopping spree by well-connected companies such as Anbang Insurance and Dalian Wanda, with Beijing is ready to cut the supply of foreign exchange for such deals. Shanghai’s municipal foreign exchange authority had told bank managers in the city that all overseas payments under the capital account bigger than US$5 million would have to be submitted to Beijing for special clearance before proceeding, the sources said. China’s central bank talks up the yuan against US dollar ‘uncertainties’

While the move did not necessarily mean all such deals would be vetoed, the regulatory procedures that would have to be navigated before completing them would take much longer, the sources said. A separate document seen by the Post, said to be the minutes of a central bank meeting on cross-border capital controls, said that from September next year Beijing would ban deals involving investment of more than US$10 billion, mergers and acquisitions valued at more than US$1 billion outside a Chinese investor’s core business, and foreign real estate deals by state-owned enterprises involving more than US$1 billion. [..] Mainland China’s foreign exchange reserves have fallen by US$873 billion since hitting an all-time high of US$3.99 trillion in June 2014. The reserves fell by US$46 billion last month, the largest monthly fall since January, but that understates the size of mainland China’s capital flight because residents are also moving yuan assets abroad.

It’ll be allowed to blunder on. TBTF.

• RBS Fails Bank Of England Stress Test (Ind.)

The Royal Bank of Scotland (RBS) has failed key hurdles in a Bank of England stress test, forcing the lender to draw up new plans in case of a financial crisis. The toughest stress test yet assessed how the UK’s seven biggest lenders would cope with hypothetical scenarios including a recession, a housing crash and a halving of the oil price. RBS, which is still 73% owned by the government after its bailout in 2008, has emerged as the worst hit in the annual health check of the banking system. This means the lender must take action to protect itself against a sharp slump in the economy. RBS has issued a plan intended to bolster its financial strength by an estimated £2bn, which has been accepted by the BoE.

The bank has also reduced its “risky” assets by £10.4bn or 21% to £38.6bn. Ewen Stevenson, RBS chief financial officer, said the bank is committed to creating a “stronger, simpler and safer” bank for their customers and their shareholders. He said: “We have taken further important steps in 2016 to enhance our capital strength, but we recognise that we have more to do to restore the bank’s stress resilience including resolving outstanding legacy issues.” Barclays and Standard Chartered also struggled under the test, however neither was required to submit a revised capital plan. The test also covered HSBC, Lloyds Banking Group, Santander and Nationwide.They did not reveal any capital inadequacies in the test, the BoE said.

“the big theme is the reduced confidence in the UK economy looking back and ahead..”

• UK Shoppers ‘Resolutely Gloomy’ About The Future Of The Economy (Ind.)

Shoppers are now “resolutely gloomy” about the country’s economic future and are putting off big purchases as uncertainty mounts, according to a respected survey. The GfK Consumer Confidence Barometer, which surveys 2,000 people, recorded a measure of –22 for confidence in the economy over the next year, down from -17 in October and –9 in September. A negative number means more people think things will get worse than vice versa. Major purchases took the biggest hit according to the report, with the index falling 9 points from 14 in October to 5 in November. People’s view of their personal financial situation over the next twelve months also fell. However, both measures are above their respective post-referendum nadirs.

Spending has so far kept up as buyers stock up on Christmas gifts but the prospect of sharply increasing prices, stagnant wages and further uncertainty over access to the UK’s single market have all weighed heavily on shoppers’ expectations over the past month. Earlier in November, the Bank of England made a dramatic rise to its inflation forecast, predicting it will almost triple from 1% to 2.7% in 2017 as the effects of a weakened pound are felt. National Institute for Economic and Social Research was even more pessimistic, saying it expected inflation to quadruple to about 4% in the second half of next year. Joe Staton, Head of Market Dynamics at GfK, said, “the big theme is the reduced confidence in the UK economy looking back and ahead. We are viewing our economy over the past 12 months with increasing despondency.” Staton said that “despite strong GDP numbers”, shoppers are “resolutely gloomy about the outlook” for the economy.

Me, I’m wondering where we are when everyone feels compelled to comment on such obvious nonsense. This morning when going through the news I kept on seeing photos of Trump and Romney having dinner. What’s the news? What’s the value? Don’t these people have more important things to do than to report on that?

• The ‘Washington Post’ ‘Blacklist’ Story Is Shameful and Disgusting (Taibbi)

Last week, a technology reporter for the Washington Post named Craig Timberg ran an incredible story. It has no analog that I can think of in modern times. Headlined “Russian propaganda effort helped spread ‘fake news’ during election, experts say,” the piece promotes the work of a shadowy group that smears some 200 alternative news outlets as either knowing or unwitting agents of a foreign power, including popular sites like Truthdig and Naked Capitalism. The thrust of Timberg’s astonishingly lazy report is that a Russian intelligence operation of some kind was behind the publication of a “hurricane” of false news reports during the election season, in particular stories harmful to Hillary Clinton. The piece referenced those 200 websites as “routine peddlers of Russian propaganda.”

The piece relied on what it claimed were “two teams of independent researchers,” but the citing of a report by the longtime anticommunist Foreign Policy Research Institute was really window dressing. The meat of the story relied on a report by unnamed analysts from a single mysterious “organization” called PropOrNot – we don’t know if it’s one person or, as it claims, over 30 – a “group” that seems to have been in existence for just a few months. It was PropOrNot’s report that identified what it calls “the list” of 200 offending sites. Outlets as diverse as AntiWar.com, LewRockwell.com and the Ron Paul Institute were described as either knowingly directed by Russian intelligence, or “useful idiots” who unwittingly did the bidding of foreign masters.

Forget that the Post offered no information about the “PropOrNot” group beyond that they were “a collection of researchers with foreign policy, military and technology backgrounds.” Forget also that the group offered zero concrete evidence of coordination with Russian intelligence agencies, even offering this remarkable disclaimer about its analytic methods: “Please note that our criteria are behavioral. … For purposes of this definition it does not matter … whether they even knew they were echoing Russian propaganda at any particular point: If they meet these criteria, they are at the very least acting as bona-fide ‘useful idiots’ of the Russian intelligence services, and are worthy of further scrutiny.”

How long would he remain alive though?

• US Intelligence Experts Urge Obama To End Snowden’s ‘Untenable Exile’ (G.)

The campaign to persuade Barack Obama to allow the NSA whistleblower Edward Snowden to return home to the US without facing prolonged prison time has received powerful new backing from some of the most experienced intelligence experts in the country. Fifteen former staff members of the Church committee, the 1970s congressional investigation into illegal activity by the CIA and other intelligence agencies, have written jointly to Obama calling on him to end Snowden’s “untenable exile in Russia, which benefits nobody”. Over eight pages of tightly worded argument, they remind the president of the positive debate that Snowden’s disclosures sparked – prompting one of the few examples of truly bipartisan legislative change in recent years.

They also remind Obama of the long record of leniency that has been shown by his own and previous administrations towards those who have broken secrecy laws. They even recall how their own Church committee revealed that six US presidents, from Franklin Roosevelt to Richard Nixon, were guilty of abusing secret powers. “There is no question that Snowden broke the law. But previous cases in which others violated the same law suggest leniency. And most importantly, Snowden’s actions were not for personal benefit, but were intended to spur reform. And they did so,” the signatories write. The Church committee, or the US Senate select committee to study government operations with respect to intelligence activities, to give it its full name, sat in 1975-76 at a time of deep public anxiety about the rogue work of federal agencies.

The aftershocks of Watergate were still being felt, and Seymour Hersh had exposed in the New York Times mass illegal activities by the CIA, including routine surveillance of anti-war groups. As the 15 staff members point out, the committee investigation led to the disclosure of jaw-dropping illegal acts including the planting of an FBI informant inside the civil rights group the NAACP, attempts to push Martin Luther King into killing himself, and Cointelpro, the vast program run secretly by the FBI to disrupt progressive organisations in the US.

Great little history lesson. Whether or not to agree with the assumptions behind it is another matter.

• The End Of Empires: Rome Vs. America (SHTFP)

The year was 451, and the battle of Chalons (also known as Catalaunian Fields and Campus Martius) was fought between a coalition of Roman legionnaires, Germanic Visigoths, and Gauls against the Huns. Flavius Aetius was the Roman commanding general, and he led his forces to defeat Attila, king of the Huns and commander of the Hun armies. The loss caused Attila to withdraw and skirmish into Italy, but again (this time through diplomacy and concessions) he withdrew in 452, returning into what is now modern Hungary. Attila died in 453, and the Hun menace to Europe had ended. Aetius had been the declining (and fragmented) Western Roman Empire’s best chance to restructure itself. He had fought in Gaul and throughout Italy and Europe for decades, sometimes even with support from the Huns before Attila began his quest for empire.

A master strategist, tactician, diplomat, and warrior, he effectively stemmed the collapse of the Western Roman Empire for another 25 years. In all probability, he may have been able to turn things around for a longer period of time. This was not to be, as he was assassinated by none other than the Emperor Valentinian III and his henchman Heraclius on 22 September 454. The emperor killed the very man who had protected and assured his throne, and worse: now there was no true strategist to take the reins of military command. The last great Roman general was no more, and the Western Roman Empire continued to decline and fragment. [..] Less than 25 years after the battle of Chalons had given it a fighting chance, the Western Roman Empire was no more. [..]And here we are, as history repeats itself, in the last days of the American Empire.

Now ready to assume the Purple and ascend to the seat of power, Donald Trump is going to command and lead (we hope). The campaigns for the midterm elections will begin in November of 2017, therefore Trump has less than one year to begin to reverse the devastation wrought by two consecutive Obama terms that have, in eight years, placed the country on its deathbed and measured it for burial. In a four-year term of office, Donald Trump has to do the job that Aetius did for Rome in two decades, with the last year of that term being wasted on the primary focus of his reelection. What is the difference between Rome and America? A vast geographical area, influxes of alien migrants, an economy that is faltering, a military less than at its best, immorality, vice, and corruption at every turn, societal degradation and a welfare state, and foreign nations ready to pounce characterize both empires.

“Hillary Clinton’s campaign was engineered from the get-go to complete the demolition of American manhood..”

• The Rediscovery of Men (Jim Kunstler)

Donald Trump was about as far from my sense of the male ideal as anything short of the Golem. His accomplishments in life — developing hotels that look like bowling trophies and producing moronic TV shows — seem as flimsy as the plastic golden heraldry plastered on his casinos. His knowledge of the world appears to be on the level of a fifth grader. He can barely string together two coherent sentences off-teleprompter. I was as astonished as anyone by the disclosure of his “grab them by the pussy” courtship advice to little Billy Bush. In my experience, it seemed a very poor strategy for scoring some action, to say the least. In a better world — perhaps even the America he imagines to have been great once — Donald Trump would be a kind of freak among men, a joke, a parody of masculinity.

But then consider the freak show that American culture has become in our time and it shouldn’t be surprising that a cartoon nation has ended up with a cartoon of a man as head-of-state. In fact, I doubt that there even is any remaining collective idea of what it means to be a man here in terms of the ancient virtues. Honor? Dignity? Patience? Prudence? Fuhgeddabowdit. The cultural memory of all that has been erased. The apotheosis of Trump may remind a few people of all that has been lost, but we’re starting from nearly zero in the recovery of it. Consider also the caliber of the male persons who stepped into the arena last spring when the election spectacle kicked off. Only Bernie Sanders came close to representing honorable manhood — in the form of your irascible old “socialist” uncle from Brooklyn — while the rest of them acted like Elmer Fudd, Mighty Mouse, and Woody Woodpecker. And then when the primary elections ended, Bernie drove a wooden stake into his own heart in a bizarre act of political hara-kiri.

Hillary Clinton’s campaign was engineered from the get-go to complete the demolition of American manhood in what turned out to be a reckless miscalculation. “I’m with her (and against him).” Too much in recent American history has been against “him” and a great many of the hims out there began to notice that they were being squeezed out of the nation’s life like watermelon seeds. Most particularly, men were no longer considered necessary in whatever remained of the family unit. This went against the truth of the matter, of course, because nothing has been more harmful to everyday life than the absence of fathers. And this was connected to the secondary calamity of men losing their roles in the workplace — and the loss of self-respect connected with that. So the election awakened some sleeping notion that life was wildly out of balance in America. And being so out of balance, it swung wildly in the other direction.

All major food firms are involved. Shun all products that contain palm oil. It’s incredibly damaging in many ways.

• Major Global Firms Buy Indonesia Palm Oil Produced By Child Labor (R.)

Global consumer companies, including Unilever, Nestle, Kellogg and Procter & Gamble, have sourced palm oil from Indonesian plantations where labor abuses were uncovered, Amnesty International said on Wednesday. Children as young as eight worked in “hazardous” conditions at palm plantations run by Singapore-based Wilmar International and its suppliers on the Indonesian islands of Kalimantan and Sumatra, Amnesty said in a report. Amnesty, which said it interviewed 120 workers, alleges that many of them worked long hours for low pay and without adequate safety equipment. The palm oil from these plantations could be traced to nine multinational companies, it said.

“Despite promising customers that there will be no exploitation in their palm oil supply chains, big brands continue to profit from appalling abuses,” said Meghna Abraham, senior investigator at Amnesty. The NGO said it chose Wilmar as the focus of its investigation as the company is the world’s largest processor and merchandiser of palm and lauric oils, controlling more than 43% of the global palm oil trade. Other companies operating palm plantations in Indonesia include Golden Agri-Resources, Indofood Agri Resources and Astra Agro Lestari.

What a blemish on the US this is.

• North Dakota Moves To Block Supplies From Reaching Pipeline Protesters (R.)

North Dakota officials on Tuesday moved to block supplies from reaching oil pipeline protesters at a camp near the construction site, threatening to use hefty fines to keep demonstrators from receiving food, building materials and even portable bathrooms. Activists have spent months protesting plans to route the $3.8 billion Dakota Access Pipeline beneath a lake near the Standing Rock Sioux reservation, saying the project poses a threat to water resources and sacred Native American sites. State officials said on Tuesday they would fine anyone bringing prohibited items into the main protest camp following Governor Jack Dalrymple’s “emergency evacuation” order on Monday. Earlier, officials had warned of a physical blockade, but the governor’s office backed away from that.

Law enforcement would take a more “passive role” than enforcing a blockade, said Maxine Herr, a spokeswoman for the Morton County Sheriff’s Department. “The governor is more interested in public safety than setting up a road block and turning people away,” Herr said by telephone. Officers will stop vehicles they believe are headed to the camp and inform drivers they are committing an infraction and could be fined $1,000. These penalties should serve as a hindrance, according to Cecily Fong, a spokeswoman for the North Dakota Department of Emergency Services. “So that effectively is going to block that stuff (supplies), but there is not going to be a hard road block,” Fong said by telephone.

One can be quite specific here. Insurers so far don’t act because the government doesn’t.

• The Areas America Could Abandon First (BBG)

So far this year, the Federal Emergency Management Agency has spent $1.1 billion on what are called Individual Assistance payments, which help households recover from natural disasters. There are no limits on the number of times a household can apply, so the program isn’t just a safety net; for some people, it’s effectively a subsidy to live in areas that are especially vulnerable to hurricanes, floods and storm surges. That hasn’t gone unnoticed in Washington. In 1999, a Nebraska congressman introduced a bill preventing some properties with multiple claims from getting help – not just disaster relief, but also subsidized flood insurance. Two years later, the George W. Bush administration’s first budget proposed denying aid to the “worst offending repetitive loss properties.”

Under President Barack Obama, FEMA proposed reducing disaster aid for public buildings damaged more than once in the previous decade if local governments hadn’t done anything to protect them. None of those proposals took effect. But as extreme weather gets worse, those federal subsidies will only become more expensive – increasing the need to rethink government support for those who choose to live in harm’s way. “Climate change is real and will lead to even more frequent and costly disasters,” Rafael Lemaitre, FEMA’s director of public affairs, told me. “We must continue to work with states to implement longer-term projects and strategies that mitigate against climate change.” That means it’s time to consider an impolitic question: If federal support gets rolled back, which areas will people have the greatest incentive to leave?

To answer that, I asked FEMA which parts of the country have the most households that repeatedly get Individual Assistance payments, which are a useful proxy for exposure to all types of extreme weather. The agency gave me a list of 1,930 counties where at least one address had requested such aid more than once since 1998 – 1.3 million households in total. That data, which the agency said it had never before compiled, is reflected in the graphic below; the shading represents the number of households per capita that have applied for FEMA aid multiple times.

Unsurprisingly, the areas where households are most likely to repeatedly request aid are generally along coasts. The surprise is how they’re distributed: Rather than being spread uniformly along shorelines, a small number of counties account for the most repeat claims – one more reminder that the burden of climate change will not fall evenly. That’s also true within the most affected counties. The charts below show the number of households per capita requesting disaster aid more than once since 1998, by ZIP code, for four areas with especially high concentrations of repetitive claims. These charts don’t just map the losers from any reduction in federal support: At a more basic level, they show some of the places Americans will face the most pressure to abandon because of extreme weather — at least, people who can’t afford the full cost of recovering from natural disasters.

Unverified, but not at all unlikely.

• Turkey Has Secret Plan To Send 3,000 Refugees To Greece Every Day (Ind.)

The Turkish government has a secret plan to allow 3,000 refugees to sail to Greece every day, intelligence officials have claimed. Greek analysts claim thousands of dinghies and motorboats have massed along the Turkish coast as the refugee deal agreed between Ankara and Brussels looks set to unravel. Turkish President Erdogan threatened to open the borders if the EU continued to block talks on the country’s accession to the union. The European Parliament voted to temporarily halt membership talks amid concerns about the brutal crackdown on dissent in the country following an attempted military coup in July. Mr Erdogan warned: “If you go any further, these border gates will be opened.

Neither me nor my people will be affected by these dry threats. It wouldn’t matter if all of you approved the vote”. The deal reached in March meant any refugee who arrived on Italian or Greek shores would be sent back to Turkey in exchange for EU member countries accepting another refugee from a Turkish camp on a “one for one” basis. Ankara will also received aid money to help it care for the refugees within its borders, visa free travel for its citizens and the speeding up of membership talks. But according to Greek newspaper Proto Thema, Ankara has given up on hope of Brussels living up to its side of the deal and could start allowing the refugees to flee “within a matter of weeks”.

Greek intelligence expert Athanassios Drougas told The Times: “No one is underestimating Mr Erdogan and his unpredictability these days. “These plans, along with explicit threats that the Turkish president has made in recent weeks, have Greece’s joint chiefs of staff seriously concerned. “They are fearful and they have told the political leadership here that if Turkey opens the floodgates yet again, Greece, in its current state of financial and social distress, will not be able to withstand the shock. It will spell war or wreak the havoc of one. “With Europe in a mess, Mr Erdogan feels he has a free hand in trying to blackmail the bloc using the refugee crisis as leverage.”